Webinar: The low-ratio backspread

Revisiting a recent forum post (Jun 29, 2012)

Hi Mark
I was considering doing a call ratio backspread using SPX and was looking at the Sept 1355/1310 in a 3:2 ratio. Have looked at the risk graph and greeks and the maximum loss. I need your advice as to whether this is a bad move in a volatile market or any market for that matter. Please critique this idea.

I have been using broken wing condors which are CTM and they seem to be working at this point in keeping me from getting shaken out too quickly. Any new thoughts on these.
Thanks for all your help.


My original reply provided the generalizations about why I don’t like to see retail traders use backspreads. Today I want to add a discussion that specifically talks about low ratio backspreads, such as the 3 x 2 that Dan mentioned.


View Updated Video

New thoughts on broken-wing condors? Not really. However, they are pre-adjusted iron condor trades and thus, less risky than traditional iron condors. This is truly a matter of style. If you feel good trading these, I offer no objections.

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