Ratio Spread Dynamic

Options Expert NIFTY Options BANKNIFTY Options FINNIFTY Options Stock Options

Moderately directional with expectation of limited movement beyond target

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Quick Reference

Strategy Type	Directional with Volatility Component
Market Outlook	Moderately directional with expectation of limited movement beyond target
Risk Profile	Limited on one side, unlimited on the other (unless hedged)
Reward Profile	Maximum profit at short strike; can be substantial
Time Horizon	7-45 days depending on structure
Capital Requirement	Moderate to High due to naked short exposure (₹50,000 - ₹2,00,000 margin for NIFTY)
Margin Type	Significant margin required for naked short leg(s)
Best Used When	Expecting move toward target with low probability of exceeding it, elevated IV for rich short premium, willing to manage unlimited risk on one side

Expecting move toward target with low probability of exceeding it, elevated IV for rich short premium, willing to manage unlimited risk on one side

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