Ratio Spread

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Dictionary Says

Definition of 'Ratio Spread'

An options strategy in which an investor simultaneously holds an unequal number of long and short positions. A commonly used ratio is two short options for every option purchased.
Investopedia Says

Investopedia explains 'Ratio Spread'

A ratio spread would be achieved by purchasing one call option with a strike price of $45 and writing two call options with a strike price of $50. This would allow the investor to capture a gain on a small upward move in the underlying stock's price. However, any move past the higher strike price ($50) of the written options will cause this position to lose value. Theoretically, an extremely large increase in the underlying stock's price can cause an unlimited loss to the investor due to the extra short call.
Search results for

'Ratio Spread'

  • Options Greeks: Delta Risk and Reward | Investopedia

    http://www.investopedia.com/university/option-greeks/greeks2.asp
    ... Call Credit Spread, Negative. Call Debit Spread, Positive. Call Ratio Spread, Negative.
    Put Ratio Spread, Positive. Call Back Spread, Positive. Put Back Spread, ...

  • Options Greeks: Gamma Risk and Reward | Investopedia

    http://www.investopedia.com/university/option-greeks/greeks5.asp
    ... Call Credit Spread, Negative. Call Debit Spread, Positive. Call Ratio Spread, Negative.
    Put Ratio Spread, Negative. Put Back Spread, Positive. Call Back Spread, ...

  • Options Greeks: Introduction | Investopedia

    http://www.investopedia.com/university/option-greeks/
    ... potential reward resides in the strategy, whether it is a long put or call, or a
    complex strategy like a strangle, butterfly spread or ratio spread, among many ...

  • Options Greeks: Introduction | Investopedia

    http://www.investopedia.com/university/option-greeks/default.asp
    ... potential reward resides in the strategy, whether it is a long put or call, or a
    complex strategy like a strangle, butterfly spread or ratio spread, among many ...

  • Options Greeks: Introduction | Investopedia

    http://www.investopedia.com/university/option-greeks
    ... potential reward resides in the strategy, whether it is a long put or call, or a
    complex strategy like a strangle, butterfly spread or ratio spread, among many ...

  • Options Greeks: Vega Risk and Reward | Investopedia

    http://www.investopedia.com/university/option-greeks/greeks3.asp
    ... Put Debit Spread, Positive. Call Credit Spread, Positive. Call Debit Spread, Negative.
    Call Ratio Spread, Negative. Put Ratio Spread, Negative. Calendar Spread, ...

  • Options Greeks: Theta Risk and Reward | Investopedia

    http://www.investopedia.com/university/option-greeks/greeks4.asp
    ... Call Credit Spread, Positive. Call Debit Spread, Negative. Call Ratio Spread, Positive.
    Put Ratio Spread, Positive. Put Back Spread, Negative. Call Back Spread, ...

  • Ratio Writing: A High-Volatility Options Strategy

    http://www.investopedia.com/articles/optioninvestor/02/111202.asp
    ... furthermore, this skew works well when you are buying a just out-of-the-money call
    and selling a larger number of deep out-of-the-money calls (ratio spread). ...

  • Advanced Option Trading: The Modified Butterfly Spread

    http://www.investopedia.com/articles/optioninvestor/10/modified-butterfly-spread.asp
    ... butterfly; while the standard butterfly spread almost invariably involves a favorable
    reward-to-risk ratio, the modified butterfly spread almost invariably ...

  • Spread-To-Pip Potential: Which Pairs Are Worth Day Trading?

    http://www.investopedia.com/articles/forex/10/spread-pip-potential-pairs-day-trading.asp
    ... Based on the data the EUR/USD and the GBP/USD have the lowest spread-to-movement
    ratio, although traders must update the figures at regular intervals to see ...

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