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Options Glossary - Most Used Terms
Ratio Call Spread
A bearish or stable strategy in which a trader buys 2 higher strike calls and sell1 lower strike call. This strategy offers limited risk and unlimited profit potential.
See Also:
Call: An Option contract that gives the holder the right to buy the underlying security at a specified price for a certain, fixed period of time.
Spread: A trade in which two related contracts/stocks/bonds/options are traded to exploit the relative difference in price change between the two. A trading strategy in which a trader offsets the purchase of one trading unit against another.
