What is the propagation ratio?

A typical Spreed ratio is an option strategy designed to benefit from non -colliding market activities, although the opposite is true for back preparation. This strategy is essentially a neutral strategy with a slight bull or bear. The ratio of the ratio includes the purchase and sale of uneven amounts at different strike prices. The position remains profitable if the price of the basic asset remains within selected strike prices. The ratio range can be designed in many other ways.

Configuration of the ratio of the ratio is virtually unlimited due to available strike prices and unlimited conditions that could be selected. The strategy can be a loan range or debit range, resulting in a clean loan or debit for the investor. The investor who wants to spread the trade ratio should use Optic software programs with graphical representations of possible results. They can be bull, bear or neutral. Bullial strategy expects to positively move prices in asset. Bear strategy assumes negative price movementin the underlying asset. Neutral strategy expects small or no movement in the price of the underlying market.

The ratio range using call options is usually vertical spread. The investor buys a number of calls at the lower price of the strike and sells more calls at a higher price of the strike. The theoretical risk is unlimited and the risk of the disadvantage is limited. The maximum profit is achieved when the price of the underlying price is at the selected price of the upper strike.

The return call ratio is commonly used. The investor sells a call for one strike and buys several calls at a higher strike price. This strategy predicts a large price movement in the underlying asset. This trade is usually initial as a credit range. The maximum profit of the disadvantage is limited to the credit received. The maximum profit is theoretically unlimited.

Typical Put ratio includes the purchase of a number of banquets and selling a larger number of banquets for lower CENU strikes. The maximum profit is realized at a lower price of the strike. The theoretical risk of the disadvantage is unlimited and the risk up is limited. This spread strategy can also be reversed to create a different set of profits/loss points and scenarios. The reverse range is also known as backssspreads.

The

ratio calendar range or diagonal ratio includes purchasing and sales options with different expiry and strike prices. The risk associated with these complex strategies may vary. The diagonal ratio can be created to make money on trend markets and escape markets. This strategy will cause loss if the shares fall sharply in the opposite direction the expected distortion.

The

Ding ratio requires education and experience in trading in options. Option trading software must be used to calculate possible risks and rewards for configured ratio. The range of situation is versatile strategies that can be very complicated. The result significantlyIt will affect factors such as volatility.