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Put Ratio Backspread

Description
	
	The Put Ratio Backspread is almost the precise opposite of the Call Ratio Backspread.
	It enables us to make accelerated profits, provided that the stock moves sharply
	downwards. Increasing volatility is very helpful because we’re net long in puts. The
	worst thing that can happen is that the stock doesn’t move at all, and even a sharp
	move up can be profitable, or at the very least, preferable to no movement at all.
	   The Put Ratio Backspread involves buying and selling different numbers of the
	same expiration puts. Typically we buy and sell puts in a ratio of 2:1 or 3:2, so we are
	always a net buyer. This gives us the uncapped profit potential. It also reduces the
	net cost of doing the deal such that we can even create a net credit! Furthermore, our
	risk is capped, though we need to investigate the strategy further in order to under-
	stand it better.
	
P/L Profile

       	

	



 
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