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Ratio Call Back Spread


 

Under this strategy there are more long call positions than short positions and the credit received from selling calls is used in ratio to buy long call positions.

Profit Assumptions: This strategy is if the assumption is bullish. However if the market goes against the assumption the trader still makes profit as being a credit spread the premium received is generally more than the premium paid.

Example: Considering the market trading at 5000 sell 1 4800 call option and buy 5200 two call options. Book profits in 4800 call if market goes down and you automatically make good profits if market goes up

Risks: This is the strategy which is a safe strategy with low risk and unlimited profit if market goes in your favor.

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