Sunday, August 30, 2009

[TheOptionClub.com] Re: General ratio spread inquiry

 

Thanks guys. I appreciate the help

-- In OptionClub@yahoogroups.com, "asdfffg1" <joshuas7@...> wrote:
>
> If XYZ is at 50, and a call ratio spread and put ratio spread are
> created using the same month expiring option contracts, what is this combination called? Is there even a name for it when ratio spreads are combined, or is it simply two basic trades? An example is below. Thanks Guys
>
> XYZ at 50
> Trader buys one Dec 2009 ATM 50 call and sells two Dec 2009 55 calls. The trader then buys one Dec 2009 ATM 50 put, and sells two Dec 2009 45 puts.
>

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