Chapter 06 · Section 6.1
P/L Profile
How would the profit/loss profile of a put ratio backspread differ from a call ratio backspread?
c) The profit/loss profiles would not differ.
No. The call ratio backspread has a bullish bias while the put ratio backspread has a bearish market bias.
a) Unlimited profit would be realized on the downside.
b) Limited profit would be realized on the downside.
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