A ratio spread which is constructed by involving deltas of options in order to create a neutral “overall” position. To fine-tune a neutral spread or neutralize a delta position, the delta of a long option is divided by the delta of a short option, and thus the hedge ratio is established. The combined delta of the option position will be zero, and hence, a small price change would have a limited effect, if any.

It is also known as a delta spread or a calendar spread.