Call Ratio Spread
Outlook: Bullish
Ratio spreads
Long 1 call + short 2 calls higher up. Pays best at the short strike. Naked tail above breakeven.
Max profit
(Short strike - long strike) - debit (or + credit), at the short strike.
Max loss
Unbounded above the upper breakeven (the second short call is naked).
Breakeven
Long strike + debit on the downside; (2 × short - long) - debit on the upside.
Legs
Long
1×
call
ATM
Short
2×
call
ATM +10
Structure
Long 1 lower-strike call + short 2 higher-strike calls, same expiration.
When to use
Specific target zone view. You want SPY at exactly $460 in 45 days, not $480.
Example
SPY at $450. Long 1x 450 call $7, short 2x 460 calls $2.50 each. Debit $2. Max profit $8 at SPY = $460; loss accelerates above $468.
Notes
- Always check the tail value at "underlying doubles" before pulling the trigger.
Build it in the simulator
Open this structure in the app, adjust spot, IV, and DTE, and watch the payoff and Greeks move.
Get the app