Ratios & backspreads

Mildly bullish, not a rally

Debit or credit

Risk: Unlimited above

Call ratio spread

Also called: Front spread, 1x2 call spread

Buy one call and sell two higher-strike calls: little or no cost, a profit peak at the short strike, and open-ended risk on a strong rally.

Payoff sketch (per unit, index points)

At expiry

Today (7 days left)

Net premium

Credit 21 pts

Max profit

+221 pts (₹14,371 per lot)

Max loss

Unlimited above the chart

Breakeven

25,421

Legs: Buy CE ATM · 2× Sell CE ATM +200. Illustration, not live prices: an index at 25,000, strikes 100 points apart, Black-Scholes premiums at 13% implied volatility, 7 days to expiry, 6.5% interest, no skew and before charges. Rupees per lot use a NIFTY lot of 65.

How it works

A bull call spread with one extra short call. The extra premium makes the trade cheap or a credit, but above the upper breakeven the extra call is naked.

When traders use it

A view of a modest rise to a target, with no expectation of a strong rally.

Greeks

Delta	Small at entry, positive or negative depending on how far out the sold calls are; increasingly negative above the short strike.
Gamma	Negative near and above the short strike.
Theta	Positive near the short strike.
Vega	Negative.

Profit, loss and margin

Max profit	(Strike gap + net credit, or − net debit) × quantity, at the short strike.
Max loss	Unlimited above the upper breakeven.
Breakeven	Upper: short strike + strike gap + net credit (or − net debit). Lower, only if entered for a debit: long strike + debit.
Margin	Margin for one naked short call (the other is covered by the long call).

In India

Short options are margined like futures: NSE Clearing's SPAN risk margin plus an exposure margin (2% of notional for index contracts, 3.5% for stocks in Arthfy's model). An at-the-money short option on NIFTY typically blocks well over a lakh of rupees per lot.
STT is charged on the premium when an option is sold (0.15% of premium from 1 April 2026 in Arthfy's cost model). A short option left to expire, in or out of the money, is not charged STT again at settlement.
Stock options and stock futures are physically settled: an in-the-money stock option held through expiry becomes a delivery of shares (taxed and margined like a delivery trade, on the full value), so brokers often square such positions off in expiry week or raise margins. Index options are cash-settled.

Arthfy numbers

Arthfy's history does not cover ratio spreads 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

Open the option chainLive premiums, IV and Greeks

Vertical spreads

Bull call spread