Ratio Call Spread
Buy 1 Call, sell 2 Calls at higher strike
Positions in Chart: Buy 1 lot of 25800 CE, Sell 2 lots of 26000 CE. Spot price: 25800
Setup
Buy 1 ATM Call + Sell 2 higher strike OTM Calls
When to Use
- Moderate bullish view with income generation
Market Outlook
Volatility Expectation↘Expected to Fall Sharply
Price Direction↗Expected to Rise Moderately
Risk & Reward
Breakeven PointTwo breakeven points
Max Contract LossUnlimited above upper breakeven
Max Position LossUnlimited
Strategy Details
Complexity LevelHigh Risk
DirectionNeutral to mild bullish
VolatilityFall
Number of Legs2 Leg
Strategy TypeCredit
Hedging CapabilityNo Hedging or Naked
Description
A ratio call spread involves buying one call and selling two calls at a higher strike
Example
If NIFTY is at ₹25,800, buy ₹25,800 Call for ₹120, sell two ₹26,000 Calls for ₹80 each. Profits if NIFTY stays between breakeven points but has unlimited risk above upper breakeven.
This information is for educational purposes only and should not be considered as financial advice. Always consult with a qualified financial advisor before making investment decisions. Data is constructed and is not actual. Calculations may have errors.
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