Front Spread (Front Ratio Spread)

Ratio spread selling more options near the money

What is Front Spread (Front Ratio Spread)?

Front Spread (Front Ratio Spread) A ratio spread where you sell more near-the-money options than you buy further-from-the-money options, all in the same expiration. The extra short option is typically covered by the long option, creating a position that profits from moderate moves to the short strike. Often entered for a credit with one naked leg.

Complete Definition

A ratio spread where you sell more near-the-money options than you buy further-from-the-money options, all in the same expiration. The extra short option is typically covered by the long option, creating a position that profits from moderate moves to the short strike. Often entered for a credit with one naked leg.