Options Trading Spread Back Ratio

Options trading spread back ratio

Back Spreads and Ratio Spreads

Back Spread and Ratio  Spreads involve putting on an unbalanced amount of Long and Short Options. If  we have more Long Options than Short, the position is called a Back Spread and  if we have more Short Options than Long, the position is called a Ratio Spread.

Options trading spread back ratio

In a Ratio spread, you have unlimited losses on one side because you have more  Short Options. The Back Spread is part of the BUSY PROFESSIONAL SERIES can be  constructed in many creative ways, and we show you how you can manage different  strike prices as well as different ratios of Long and Short Options to  construct an optimal Back Option Spreads.

We don’t recommend Ratio spreads as they have an unlimited  loss potential.

Trade Checklist: Ratio Spread - Options Trading Concepts