What is this strategy called?

Discussion in 'Options' started by torontoman, Jun 19, 2007.

  1. he's long 5 50/60 call verticals with 5 extra long 50 calls:

    +10 50C
    -5 60C

    a "conventional" ratio spread (ShortMore) would be:

    +5 50C
    -10 60C

    and a "conventional" backspread (LongMore) would be the reverse:

    -5 50C
    +10 60C
     
    #11     Jun 19, 2007
  2. The position simply emulates that of a
    'cheaper' long call. Why would you do it when you can just buy an outright call? That's probably why you've never seen this advised.
    db
     
    #12     Jun 20, 2007