What Is A Ratio Spread?

The rules of the options markets generally limit the maximum number of options on the same side of the market (i.e., calls held plus puts written, or puts held plus calls written) with respect to a single underlying interest that may be carried in the accounts of a single investor or group of investors acting…

We empower millions of customers around the world to start and grow their businesses with our smart marketing technology, award-winning support, and inspiring content.

This is when you own shares in a particular stock and then you sell Calls against it and then buy Puts. You would use this strategy when you think that the stock rice is a little overdone and you are expecting some downside. This has limited risk due to the long put option, but also…

Parity is basically a set of rules of equality that exist in the options market. For example, long stock and long puts is the as owning long calls. Parity generally holds, but (all else being equal) puts will often trade at lower prices than calls due to the impact of dividends and interest rates.

Options sweeps that go off near the ask are usually signs of aggression and a possibility of a higher probability trade. This is due to the fact that a trade that goes off at the ask means that the trader thought it was more important to get into the trade, by hitting the ask, than…

This is also known as the Strike Price, it is the price at which a call buyer can call/buy the underlying Stock/ETF or a put buyer can sell the underlying Stock/ETF See also: Options Exercise, Exercise Settlement Value, Automatic Exercise