Ratios & backspreads
Strongly bullish
Debit or credit
Risk: Defined: worst at the long strike
Call ratio backspread
Also called: Call backspread, 1x2 call backspread
Sell one call and buy two higher-strike calls: unlimited gain on a strong rally, a small result on a fall, and the worst outcome at the bought strike.
Payoff sketch (per unit, index points)
At expiry
Today (7 days left)
Net premium
Debit 21 pts
Max profit
Unlimited above the chart
Max loss
−221 pts (₹14,371 per lot)
Breakeven
25,421
How it works
The sold call pays for the two bought calls. A fall leaves all three worthless (keeping any credit); a big rally runs on the extra long call; a moderate rise to the bought strike is the worst case.
When traders use it
- Expecting a large upside move, with little cost if wrong on direction.
Greeks
| Delta | Small at entry, growing positive on a rally. |
| Gamma | Positive near and above the bought strike. |
| Theta | Negative near the bought strike. |
| Vega | Positive. |
Profit, loss and margin
| Max profit | Unlimited above the upper breakeven. |
| Max loss | (Strike gap − net credit, or + net debit) × quantity, at the bought strike. |
| Breakeven | Upper: bought strike + strike gap − net credit (or + net debit). Lower, only if entered for a credit: sold strike + credit. |
| Margin | The short call is covered by one of the long calls, so little beyond the debit. |
In India
- SPAN margins the whole position, so a defined-risk spread usually blocks far less than its short leg alone. Brokers grant the hedge benefit only when the protective leg is actually in the account, which is why the long leg is usually placed first.
- A long option that finishes in the money is exercised automatically. STT is then charged on its intrinsic value at the exercise rate (0.15% from 1 April 2026 in Arthfy's cost model), instead of the sale rate on the premium (also 0.15%) that applies when the option is sold before the close. See the lesson on the STT exercise trap.
Arthfy numbers
Arthfy's history does not cover backspreads yet.
Try it in the F&O hub
Opens the tool with this structure on today's NIFTY chain. Reading is free with an Arthfy account; some runs use free attempts.Open in the builderPayoff, Greeks, scenario grid and charges on today's NIFTY chain
Backtest since 2016Daily data, every NIFTY expiry
Replay on expiry daysMinute data since October 2024
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