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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