August 3, 2020

Option Ratio and Backspreads

 
A ratio spread is a neutral options strategy in which an investor simultaneously holds an unequal number of long and short or written options. … Conceptually, this is similar to a spread strategy in that there are short and long positions of the same options type (put or call) on the same underlying asset.
 
A backspread is s a type of option trading plan in which a trader buys more call or put options than they sell. The backspread trading plan can focus on either call options or put options on a specific underlying investment.
 
Click the video below to learn in more detail.

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about the author:

Mike Shorr

Since 1994, Michael has been an on-the-floor market maker, Vice-President of Interest Rate Derivatives for Knight Financial Products and Director of Education and Options Instructor at Trading Advantage. He makes the oftentimes complex world of options and trading accessible to the novice and advanced trader alike. Michael has a Bachelor of Science degree in Statistics and Finance from the University of Illinois Champaign-Urbana. He presently is Director, Trader Education at ProsperTradingAcademy.

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May 8, 2024

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