Trading with ratio spreads

摘要

Ratio spreads offer the opportunity to limit losses in exchange for a limited gain potential, but they also involve significant risk in certain market conditions. Once you understand when these multi-legged trades work best, you can take advantage of the edge they offer. Spreads are highly effective means of trading. Vertical spreads, calendar spreads, diagonal spreads, butterfly spreads, condor spreads, etc., all have a unique purpose for particylar market situations. Here, we will look at the construction and benefit of ratio spreads.