Chapter 06 · Section 6.1
Potential losses
Your potential losses are:
a) limited on the upside and unlimited on the downside.
b) limited on the downside and unlimited on the upside.
c) unlimited on both the upside and the downside.
d) limited on both the upside and downside.
Two or more short puts at the lower exercise price and one long put at the higher exercise price constitute a ratio put spread.