Ratio spreads are like the bull and bear call spreads you know except that the number of call bought and sold at the different strikes are different. You create two ratio call spreads. The first ratio spread uses two short 105 strike calls for one long 100 strike call from the table below. The second ratio spread uses three 105-strike calls for one long 100-strike call. 

What is the cost of the first and the second ratio spread respectively?

 

 

Answer rating: 100% (QA)

To calculate the cost of each ratio spread we need to ... View the full answer