Ratio Put Spread

Options Spreads Advanced NIFTY BANKNIFTY FINNIFTY Stock Options

Moderately Bearish to specific target with strong support

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Quick Reference

Strategy Type	Ratio Spread - Bearish with Income
Market Outlook	Moderately Bearish to specific target with strong support
Risk Profile	Limited above long strike, SUBSTANTIAL below lower breakeven
Reward Profile	Maximum at short strike price
Time Horizon	15-30 days
Capital Requirement	Net debit Rs.1,000-5,000 plus naked put margin Rs.50,000-70,000
Best Used When	Bearish to specific support level in high IV environment with strong conviction price will NOT fall below lower breakeven

When to Use This Strategy

Bearish to specific support level in high IV environment with strong conviction price will NOT fall below lower breakeven

Payoff Diagram

P/L │ │ ╭──────╮ │ ╱ ╲ │ ╱ ╲ │ ╱ ╲ │ ╱ ╲ ─┼────────────────●──────────●────────────●── Stock Price │ ╱ │ │ │ │ ╱ │ Short Strike Long Strike │ ╱ │ (Max Profit) │ ╱ Lower BE Upper BE │ ╱ │ ╱ UNLIMITED LOSS │ ╱ │╱

India-Specific Notes

Trading Hours

Equity	9:15 AM - 3:30 PM IST
Derivatives	9:15 AM - 3:30 PM IST
Pre Open	9:00 AM - 9:15 AM IST

Expiry Behavior

Weekly Expiry	Every Thursday (NIFTY, BANKNIFTY, FINNIFTY)
Monthly Expiry	Last Thursday of month (Stock options)
Settlement	Cash settled for index options
Ratio Note	Put skew is typically steep in India - OTM puts often expensive, making ratio put spreads attractive

Lot Sizes

Stocks

Varies by stock (check NSE)

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