Call Ratio back spread

F&O
1

Hi
I want to implement call ratio back spread for sun PHARMA july by selling 470 Ce (36.1) and buying 490 Pe(2*8.25),so net credit to account becomes 19.6.And the max loss in this case
Spread -19.6=0.4.
Are the calculations ok?

2

Your understanding of Call Ratio Backspread is wrong. Read this to get better understanding before implementing this strategy or you can do serious harm to your capital.

1 Like
3

As per the strategy
Sell.one lot of ITM AND BUY TWO LOTS OF OTM ,WHICH IN THIS CASE IS 470 AND 490!
Can u please correct where I am going wrong ?

4

Both should be calls ce

5

Both Are Calls .
I want to implement call ratio back spread for sun PHARMA july by selling 470 Ce (36.1) and buying 490 Ce(2*8.25),so net credit to account becomes 19.6.And the max loss in this case
Spread -19.6=0.4.
Corrected
Are the calculations ok?

6

You mentioned PE 490

7

Typing error…
So is the above calculation correct ?

8

In Call Ratio Backspread both options should belong to same Expiry, you are selling ITM CE of July Expiry and buying OTM CE of June Expiry (as per your price quoted).

You can use Sensibull Strategy Builder to check pay-off graph of this strategy https://web.sensibull.com/option-strategy-builder