Learning To Invest

Ratio Put Spread: Buy Put On Upper Strike (S=50), And Sell More Than One Put On Lower Strike (S=45)


             Risk: Unlimited-downside, limited-upside
             Profit Potential: Limited-at lower strike
             Equivalent Positions: None
             Follow-up Action: On downside buy more long puts to alter ratio


Ratio Write: Long Stock (P=50) And Sell Two Calls (S=50) Against It

             Risk: Unlimited-both up and down
             Profit Potential: Limited-at strike
             Equivalent Positions: Straddle Write & Ratio Put Write (Short Stock/Short 2 Puts)
             Follow-up Action: Rolling up and down


Calendar Spread: Buy A Long Term Call And Sell A Short Term Against It. Neutral-Stock Price At Strike. See
     Bullish Calendar Spread