How To Make $306K with $2.8K : Back Ratio Options Strategy

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In this video we study how positive Vomma can be used in a bearish market move to create tremendous returns. Although many option traders do not know it, the back ratio spread possesses positive Vega and positive Vomma, so when implied volatility rises, returns can be handsome since the rate of return increases with the rise in volatility.

In this video we test a back ratio spread options strategy to study how it behaves over a bearish move in 2008.

We find that this particular back ratio spread peaked at a max profit of $306,125 during this backtest.

We hope this video helps traders remain safe as well as profitable long-term. Good luck with your trading and thank you for watching this video lesson.

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