Chapter 06 · Section 6.1

Mechanics of a Ratio Put Spread

To put on a ratio put spread, you:

a) sell one of the lower strike and buy two or more of the higher strike.
No. The profit/loss profile describes in answer (a) would be rather skewed - with heavy profit if the market falls.
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.