Ratio Calendar Spread

Ratio Calendar Spread

Selling more near-term options than longer-term ones purchased, all with the same strike; either puts or calls.

Ratio Calendar Spread

An option spread in which an investor buys options with a long maturity while buying more options with a shorter maturity. All options have the same strike price and may be either calls or puts, but not a combination of the two. A ratio calendar spread is used to reduce risk on price movements to the underlying security.