Build a Call Ratio Backspread Strategy
What is a call ratio backspread?
BullishUnlimited ProfitLimited Loss
An extremely bullish strategy that gives great profits when the stock makes a big upwards move, and a loss if it only moves a bit. If established for a net credit and the stock goes down, you can actually still make a small amount.
Time is generally harmful to this strategy, and increasing volatility is helpful.
- Sell a call at strike A
- Buy two calls at strike B