The Ratio Put Spread (AKA Put Front – Ratio spread) in an unlimited risk strategy profits when the underlying Stock, Future, or ETF’s market direction is slightly Bearish to market neutral. While the nature of this strategy is unlimited risk, the added short Put (this short Put makes this strategy unlimited risk) eliminates all upside risk. If a trader believes that a stock (or ETF), in their portfolio, is going to trade sideways to lower from its current location but wants to be able to hedge some of the risks in the event that stock (or ETF) rallies higher, it may be a great time to implement a Ratio Put Spread.

Join Eric “The Wolfman” Wilkinson, former Chicago Board of Trade floor trader and 25-year professional trader, as he explains how traders can profit from multiple movements in an underlying and how they can take advantage of High Implied Volatility. He will show when it is appropriate and how to correctly implement a Ratio Put Spread with any stock or ETF.