Put Ratio Vertical Spread

Put Ratio Vertical Spread Payoff Graph

B/SStrikeTypePrice
Sell 2$29Put$0.44
Buy 1$31Put$1.46
Net Debit$58

A Put Ratio Vertical Spread is short two OTM put options and long one ITM put option.

The Max Loss uncapped on the downside and limited to the net premium paid on the upside.

The Max Gain is limited to the difference between the two strikes less the net premium paid.

Characteristics

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

Put Ratio Vertical Spread Greeks

Delta

Put Ratio Vertical Spread Delta Graph - 30 Days to Expiration
Put Ratio Vertical Spread Delta Graph - 3 Days to Expiration

Gamma

Put Ratio Vertical Spread Gamma Graph - 30 Days to Expiration
Put Ratio Vertical Spread Gamma Graph - 3 Days to Expiration

Vega

Put Ratio Vertical Spread Vega Graph - 30 Days to Expiration
Put Ratio Vertical Spread Vega Graph - 3 Days to Expiration

Theta

Put Ratio Vertical Spread Theta Graph - 30 Days to Expiration
Put Ratio Vertical Spread Theta Graph - 3 Days to Expiration

Comments (4)

PeterMarch 26th, 2014 at 3:30am

It will likely be a debit spread - especially if the payoff graph looks like the one on this page. It does depend, however, on the premiums of the option prices when establishing the trade.

GCMarch 22nd, 2014 at 7:16pm

I think a put ratio spread should be a credit spread, isn't that so?

jayMarch 8th, 2014 at 8:58am

i m unable to diffrentiate between the components of PUT RATIO VERTICAL SPREAD AND BACK SPREAD. As the payouts are different, the strategies are diff. Pls elaborate a bit more.
thanx

AUMKARAugust 3rd, 2010 at 1:29pm

This one is the strategy, one can use for the one or two days.

Add a Comment


  8
     Subscribe for Comment Updates