What is this called???

Discussion in 'Options' started by asdfghj7, Mar 25, 2009.

  1. XYZ is currently at 15
    We buy one 3 month 15 put for 3pt and
    sell two 12.5 puts for 1.5 each
  2. Stock price not relevant
    Option premium not relevant

    This spread has different names

    It's a put front spread

    It's a ratioed put vertical spread

    It's a butterfly, missing one leg

    But I'd go with 'front spread'

  3. Isn't this just a simple 1x2 put spread? I assume it's the same expiry...
  4. It's a ratio spread. I learned that right here from reading other posts :)

    "I've been recently been developing a strategy generally focused around the idea of a RATIO SPREAD trade where an ITM/ATM/or OTM call or put is purchased by the buyer, who finances it with 2 further OTM options in the same month or buying one option and financing it with a higher strike further out month option."
  5. ngkh


    maybe this helps : http://www.optiontradingpedia.com/