Put Ratio Spread Update
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In Gaming the Selloff with Put Ratio Spreads, we reviewed a February 1x2 put ratio spread on the SPY. Fast forward 2 weeks, tack on a 2% drop in the SPY and a largely unchanged VIX and what do we have?
A profitable trade.... so far.
Though there are a lot of moving parts with ratio spreads, the gist was to profit from a mildly bearish move in the underlying as well as a decline in implied volatility. While we haven't had much of a decline in volatility, the two weeks of time decay and drop in price have helped the trade mature into a decent sized profit.
Read the full article: http://tylerstrading.blogspot.com/2010/02/put-ratio-spread-u...
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