Talk about the option strategy of taking a small risk and a big risk, the ratio spread strategy
If you only have $1,000 or $500, how can you follow the rising trend with a small risk and not get liquidated due to a pullback or a spike?
It's very simple, don't do contracts, do options.
For example, you think the price of Auntie may rise to around 3,650 next week. Then, you can buy a call option with an exercise price of 3,600 and sell two call options with an exercise price of 3,750, both of which expire next week.
Then, when Auntie rises to around 3,650 next week, you will reap the maximum profit, which is about 10 to 20 times leverage, but you will not get liquidated due to a sharp drop.
At the same time, your option fee is almost zero cost.
The only risk is that if Auntie rises more than 3,750, you will suffer a loss.
How to define your own ratio spread price range needs to be determined based on your risk tolerance and the overall market trend.
Have you ever done a ratio spread strategy? Compared with the bull market spread, it has a smaller investment and higher returns. The risk of loss from a unilateral surge is greater, and the risk of loss from a unilateral plunge is smaller.
