Put Ratio Backspread
The same, but a bet on a sharp crash down: in a panic the profit is huge, and if the market rises you're nearly loss-free.
How the Put Ratio Backspread works
The two long put legs give a large profit on a crash; the sold put funds them. The worst case is price at the lower sold strike. With a credit, a small profit to the upside.
Placing strikes at GEX levels
It suits a negative-GEX regime where drawdowns accelerate. Sell the put at near support and buy the longs lower, beyond the Put Wall where a strong flush reaches.
The Put Wall and hedging pressure are computed live in the GEX Terminal — Position Builder.
When to open, the Greeks and managing the position
It suits overheated, unstable markets ahead of crises, corporate scandals or harsh sanctions. The outsized payoff opens up in a panic below the lower strike; on a strong rally all puts expire worthless and you keep the credit. The worst case is price at the lower strike, loss = (strike gap − credit).
Greeks: long vega — a panic drop usually lifts IV and helps the long puts. Management: avoid price "sticking" at the lower strike, rolling the legs if needed.
FAQ
When you expect a sharp, strong drop. The worst case is price at the lower sold strike.
Often for a small credit; it depends on the strikes and IV.
Build the Put 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.