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Bullish

Put Ratio Vertical Spread

Put Ratio Vertical Spread

Components

Short two OTM put options and long one ITM put option.

Risk / Reward

Maximum Loss: Unlimited on the downside and limited to the net premium paid on the upside.

Maximum Gain: The difference between the two strike prices less the premium paid for the position.

Characteristics

When to use: When you are neutral on market direction and bearish on volatility.

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