Investment Banking
LoC
May 12, 2022
Derivatives
Callable Option
May 12, 2022

An options trading strategy which involves selling a number of in-the-money calls at a set strike and simultaneously buying a larger number of out-of-the-money calls at a higher strike. For example, a 2×1 ratio call spread involves selling one call and buying two higher-strike calls.

The call backspread is also known as a ratio call spread or a ratio spread long call.

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