ratio writing

ratio writing
When an investor writes more than one option to hedge an underlying futures contract. These options usually are written for different delivery months. Ratio writing expands the profit potential of the investor's option position. Example: an investor would be ratio writing if he is long one August gold contract and he sells (writes) two gold calls, one for February delivery, the other for August. The CENTER ONLINE Futures Glossary

Financial and business terms. 2012.

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