Build a Put Ratio Spread Strategy
What is a put ratio spread?
BearishLimited ProfitNearly Unlimited Loss
The opposite of a put ratio backspread. It is a neutral to slightly bearish strategy with unlimited risk if the stock moves down too much. Time is helpful to this strategy (although you don't want to be exposed for too long), but increasing volatility is harmful.
- Sell two puts at strike A
- Buy a put at strike B