Call Ratio BACKSPREAD Calculator ??
- Thread starter md2324
- Start date
Can you not spot that in the chains?
If you look at enough options, this stuff should be second nature. Pull out a sheet of paper and do it the old fashioned way...you'll be proficient at it within a week...unless of course you're looking at aggregating all combinations in a list to sort them.
If you look at enough options, this stuff should be second nature. Pull out a sheet of paper and do it the old fashioned way...you'll be proficient at it within a week...unless of course you're looking at aggregating all combinations in a list to sort them.
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This is pretty simple...
Initially, just forget about the premium paid or received.
Then think about it in terms of long or short total legs across the spot values, where the breaks/turns are at the strike.
So for instance:
-1/+3 50-40 put ratio, premium received of 0.50 (credit).
Breaks at 50 and 40, below 50 short 1 put, below 40 long 2 puts...
So excluding the premium, BE-1 is 50 and BE-2 is 35. (strike - 10/2 (which is strike diff / net position) Max loss at 40 of -10.
Including the premium, BE-1 is 49.50 and BE-2 is 35.50, Max loss at 40 of -9.50
Hmm... I guess it's more like second nature for me, takes a bit of practice....
Initially, just forget about the premium paid or received.
Then think about it in terms of long or short total legs across the spot values, where the breaks/turns are at the strike.
So for instance:
-1/+3 50-40 put ratio, premium received of 0.50 (credit).
Breaks at 50 and 40, below 50 short 1 put, below 40 long 2 puts...
So excluding the premium, BE-1 is 50 and BE-2 is 35. (strike - 10/2 (which is strike diff / net position) Max loss at 40 of -10.
Including the premium, BE-1 is 49.50 and BE-2 is 35.50, Max loss at 40 of -9.50
Hmm... I guess it's more like second nature for me, takes a bit of practice....
You made that sound so complicated.
You made that sound so complicated.
Yeah, I typed it all and then thought... he's not gonna get it this way... hahaa
Drawing it out will clear things up. And if you've done that a bunch of times... you'll know what to do without pen and paper.