A ratio spread. There are many names for it, some call it a “one-by-two”, some call it a “back spread”, but it simply involves buying (or selling) a vertical spread and selling (or buying) an extra out-of-the-money leg. We do not do these types of spreads in the room typically due to the constrictions of most of our client’s accounts. But, it’s important to know what they are and how they work.
Click the video below to see how I break this down for the class.
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Options traders employ numerous strategies to achieve their goals in the market, and the broken-wing butterfly is a particularly useful technique to have at your disposal. This guide will explain the strategy in detail and show you how it can potentially be leveraged in various situations to take advantage of the market environment. Want My […]
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Understanding the Delta of an option is crucial for both new and seasoned traders. It’s one of five specific calculations called “Greeks,” which help measure specific factors that could influence the price of an options contract. Delta is a metric that helps you gauge how much the value of an option contract is expected to […]
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