neutral strategy RATIO SPREAD WITH CALLS

Example: Buy 1 call;
sell 2 calls at higher strike
Market Outlook: Neutral to slightly
bullish
Risk: Unlimited
Reward: Limited
Increase in Volatility: Typically hurts
position
Time Erosion: Typically helps position
BEP: Two BEPs
1. Long call strike plus premium paid
2. Short call strike plus
[(the difference between the long
call strike and short call strike)
minus premium paid]