Call Ratio Backspread
You expect a sharp, powerful surge. The construction is nearly free (sometimes it even pays you), and on a strong upswing the profit is huge; while if price falls, you lose almost nothing.
How the Call Ratio Backspread works
The two long legs give unlimited upside on a strong rally; the sold call funds them (sometimes a net credit). The worst case is price stalling at the upper strike. To the downside, with a credit, a small profit.
Placing strikes at GEX levels
It suits a negative-GEX regime (amplified moves). Sell the call at near resistance and buy the longs higher, beyond the Call Wall where a strong impulse reaches.
The Call Wall and hedging pressure are computed live in the GEX Terminal — Position Builder.
When to open, the Greeks and managing the position
Open it before strong upside breakouts — e.g. on growth stocks ahead of product launches or quarterly earnings. Profit on an explosive rally is unlimited; the worst case is price stalling at the upper strike, where the loss = (strike gap − credit). Below the lower strike you keep the net credit.
Greeks: long vega (rising IV helps the two long calls). Management: the most painful zone is at the upper strike, so navigate it with active management or by rolling the long legs.
FAQ
When you expect a sharp, strong rally rather than a moderate one. The worst case is price at the upper strike.
Often opened for a small credit, but it depends on the chosen strikes and IV.
Build the Call Ratio Backspread on live BTC and ETH quotes in the Position Builder.
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Information is for educational purposes only and does not constitute investment advice. Options trading carries high risk.