Put Ratio Back Spread

The concepts of Put Ratio Back Spread and Put Ratio Front Spread are inversely related, just like in the case of call ratios.

This strategy is used in a bearish market outlook and involves buying more put options than the number of put options sold. Essentially, it is a bet on a significant downward movement in the price of the underlying asset. In this setup, traders buy a larger number of puts at a lower strike price and sell fewer puts at a higher strike price.


  • Sell ATM/OTM Put Option – 1 Lot
  • Buy Far OTM Put Options – 2 Lots

Same Strike for Distant OTM Puts:


  • Buy 31700PE at 42 – 2 Lot
  • Sell 31800PE at 71 – 1 Lot

The payoff graph looks like –

Different Strikes for Distant OTM Puts:

Example –

When we construct strangles instead of straddles in a similar manner we have done for Ratio Spread we get the following –

  • Buy 17500PE at 480 – 1 Lot
  • Buy 17200PE at 400 – 1 Lot
  • Sell 18000PE at 583.35 – 1 Lot

The payoff graph looks like –

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