Hopefully you are papertrading, and not using real money. At least, make your positions very small until you understand what you are doing. On every trade, somebody is going to win, and somebody is going to lose == can you guess which one is the newbie.
Exactly, and thanks for explaining. Vega is more important than delta or gamma on these spreads, at least in the short term. As to whether '1x2' is kosher terminology -- yes, it's heard, and it has the advantage of flexibility... 1x3, 1x4, 2x3, whatever.
It is a long delta, short vega, short gamma position that will have open-ended loss. Risk is on the downside. You can play different cases in the Options Lab at http://www.TheOptionsLab.com make sure you choose Offline tab so that you can enter the data manually. Also the price you mentioned does not make senses. IV between 118 and 117 puts cannot be that off.
I'm clearly outvoted in my view that this is the wrong term for the trade. I've never worked on the floor, as I prefer staying home in boxer shorts to trade, so I don't know the floor lingo. My objection to the term is that it speaks only to the ratio of long and short options in each leg, which leaves out a few key details. I prefer frontspread or vertical ratio spread, which could even be qualified with the ratios if it seems pertinent. This of course is mere nomenclature, but it started out as a chance to hate on CNBC and the know it alls who throw around the ratio term. Who can blame me for that?