Chapter 06 · Section 6.1

Mechanics of a Ratio Call Spread

To put on a ratio call spread, you:

• a) sell one of the lower strike and buy two or more of the higher strike.
  No. This will result in a call ratio backspread, a volatile market trading strategy.
  b) buy two or more of the lower strike and sell one of the higher strike.
  c) buy one of the lower strike and sell two or more of the higher strike.
  d) sell two or more of the lower strike and buy one of the higher strike.