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Ratio Backspread

A strategy using all puts or all calls whereby the trader buys OTM options in a ratio of 3:2 or 2:1 to the ITM options he sells. In this way the trader is always long in more options than those he is short in.

Related Terms:

Calendar Spread
Applying to derivative products, a strategy in which there is a simultaneous purchase and sale of ...

Ratio Put Spread
A bullish strategy that involves the trader being short in more, lower Strike puts than those ...

Ratio Spreads
Ratio spreads are an evolution of the bull call or bear put spread. They combine long ...

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