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options strategy

Call Ratio Spread: Profit from a moderate rally — but beware the danger zone above sold strikes

July 24, 2026
Call Ratio Spread: Profit from a moderate rally — but beware the danger zone above sold strikes

What is a Call Ratio Spread?

A Call Ratio Spread (or Bull Ratio Spread) means you buy 1 lower-strike Call and sell 2 higher-strike Calls. The sold calls generate a credit that can offset or more than cover the bought call. You profit from a moderate rally but face increasing losses if the stock rises too far past the sold strikes.

At a Glance

Max Profit

At the higher (sold) strike

Max Loss

Unlimited above sold strikes

Breakeven

Lower Strike + Net Debit/Credit

Type

Stock rising past sold strikes

How to Set It Up

ActionTypeStrikeExpiryQty
BuyCall (CE)Lower Strike (ATM/OTM)Same expiry1 Lot
SellCall (CE)Higher Strike (OTM)Same expiry1 Lot

P&L Simulator

Call Ratio Spread

📊 Call Ratio Spread — Payoff Chart + P&L Calculator

Index Price: 22000 · Buy Call Strike: 22000 · Sell Call Strike: 22500 · Net Credit/Debit: 50 · Lot Size: 75 · Price at Exit: 22400

When Should You Use This Strategy?

✓ When to Use / ✕ When to Avoid / ◉ IV / ◷ DTE

3 use items · 2 avoid items

#options strategy

Disclaimer

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