Put Ratio Spread

Put Ratio Spread is a neutral to a bullish strategy with no upside risk. It is doing by selling a far OTM put option to Long Put Vertical Spread. It is also known as the 1PE2PE Strategy.


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

Ideal IV Environment: High

Maximum Profit: Distance between the strikes + Credit received

How to Calculate Breakeven(s):

  • Upside: Short Call Strike + Maximum Profit Potential ( i.e. Maximum Profit/Lot Size)
  • Downside: None


Here goes an example – https://unofficed.com/options-calculator/?save_id=5dde7de893a98660557422

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