From Theory To Practice - April 13, 2021 - How to Choose Ratio Spreads: Wide or Narrow?

published 1 month ago by tastytrade, Inc.

Ratio Spreads are great strategies that offer versatility and flexibility that is difficult to find anywhere else. With the potential to profit from a directional move in either direction, they can be used with either a bullish or bearish bias in the market. When executing a Ratio Spread, however, one of the choices that has to be made is to use a wide spread or a narrow spread. Not surprisingly, there are pros and cons to both choices, so today we take a look at what these pros and cons are with our potential Ratio Spread in XBI.

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