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Call Ratio Backspread

Aim:

Capital Gain

Cost:

n.a.

Trader’s Outlook:

Bullish

Description:

This strategy consists of a short position in NS close to ATM call options with a strike price K1 , and a long position in NL OTM call options with a strike price K2, where NL >NS . Typically, NL = 2 and NS = 1, or NL = 3 and NS = 2. The trader’s outlook is strongly bullish. This is a capital gain strategy.

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