A ratio call spread is used when you expect the underlier to go up, but not beyond a certain point. A ratio call spread consists of a single long position in a call and a number of short positions in calls of higher strikes, the latter are used in order to finance or reduce the cost of the long call.
Want to learn more? Download now an interactive reference application for iPhone. The screenshot shows the following portfolio:
Volume | Instrument |
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1 | European call struck at 9.000 with expiry in 30 days |
-2 | European call struck at 11.000 with expiry in 30 days |
This is an excerpt from iOptioneer option trading reference application. In order to build the real-time dynamic strategy graph and run simulations you will need to download the application from App Store.
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