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Put Ratio Spread

Description

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Buys one put at a higher strike and sells two at a lower strike in the same expiration, usually for little or no net cost.

The second short put is not covered by the long leg, so a decline carrying well below the lower strike keeps producing losses, which is the exposure this structure trades premium for. Each contract is quoted from bid and ask, the net premium is totalled, and the payoff grid shows the peak at the short strike and the downward slope underneath it. Strikes and ratio are editable inputs.

Template Screenshots

Put Ratio Spread screenshot 1

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