Put Ratio Front Spread strategy in options trading - Stock market technical analysis #shorts #krinu

Put Ratio front spread is a Neutral or Moderately bearish strategy here the Investor constructs this spread ratio with these Contracts

1. Sells or writes two Out of The Money (OTM) Put options and receives the premium

2. Buys one At The Money (ATM) Put option and pays the premium

which results in 2:1 ratio and a net credit to his account as he had sold two contracts against one

Case:1
If Nifty trades above the spot value (Bullish ) or trades sideways (Neutral) but above the break even of Leg-2 (1 Put bought) at Expiry,

he makes a Profit from Leg-1 but a loss from Leg-2 , which will result in a net profit overall.

Case:2
If Nifty trades between the range of Leg-1 and Leg-2 or in other words its Moderately or Slightly Bearish at Expiry,

he makes a maximum profit here , he makes profits from Both Leg-1(two Puts Sold) and Leg-2 (One Put bought).

Case:3
If Nifty trades below the break-even of Leg-1 (two Puts sold) means its extremely bearish

he makes a loss from Leg-1 and profit from Leg-2 , since the two puts sold (Leg-1) incurs loss it results in net loss in this case

Put ratio spreads are also called as Put Ratio Front Spread to implement this strategy effectively the outlook for the underlying (Nifty here) should be Moderately Bearish , Bullish or Neutral it should not be extremely Bearish.
Join this channel to get access to perks:
https://www.youtube.com/channel/UCLlvV6YwZnF6wLGBQuOyTcg/join

Видео Put Ratio Front Spread strategy in options trading - Stock market technical analysis #shorts #krinu канала Krinu