Ratio Call Spread Strategy
BullishAdvancedRatio Spread
Profit from moderate upward movement while collecting premium, but beware of unlimited upside risk.
How It Works
1
Buy Lower Strike: Purchase fewer calls at lower strike (typically 1 contract).
2
Sell Higher Strikes: Sell more calls at higher strike (typically 2+ contracts).
3
Manage Risk: Monitor for large upward moves that create unlimited risk.
Key Metrics
Max Profit:At higher strike at expiration
Max Loss:Unlimited above upper breakeven
Lower Breakeven:Lower Strike + Net Premium
Upper Breakeven:Higher Strike + Max Profit
Best Case:Stock at higher strike at expiration