WDIS: The Classroom

Ratio Spread Management

WDIS: The Classroom

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Today, with the classroom at full strength, we start by looking at Brittany’s Ratio Spread in GM. In doing so, we are reminded that there are two components to a Ratio Spread: a Vertical Spread and an extra Short Put. So, we manage her Vertical Spread at nearly max profit, roll out her Short Put, and add a Short Call to the position. In the end, we end up with an excellent, step-by-step guide for how to manage a Ratio Spread.

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