Bull Ratio Spread Option Strategy

Bull Ratio Spread:

The Bull Ratio Spread could be called as a variation of the Bull Call Spread. Here we expect the stock to move sideways
to slightly higher.
The Position is created by purchasing a call (preferably At-the-money or slightly Out-of-the-money) and selling more than
one calls at a higher strike price in a ratio of 1:2 or 1:3 (preferably near to the target price) with the same expiration (same
month).

The strategy is preferred when the upside seems to be decisively capped.

A short time till expiration is generally preferred for the strategy to take advantage of the time decay in the short options
and not give the stock enough time to move very high in price and produce a loss.

• Maximum Risk: Unlimited on the upside, Limited on the downside to the initial debit paid or none if the position is opened for a credit.

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