Strategies · Lesson 11 of 14 · Lab
Call ratio back spread
A call ratio back spread sells one call and buys two higher ones, producing an open-ended gain on a large rise and a loss in a band just above the sold strike. On 22 September 2026, selling the NIFTY 23,400 call and buying two 23,500 calls collected ₹28.50 with a maximum loss of ₹71.50 between 23,429 and 23,572. The index closed at 23,329 and it kept ₹28.55.
NIFTY weekly expiry, 22 September 2026 · MarketCue one-minute option-chain capture
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A chain that actually traded, priced at the open. Click once to buy, twice to sell, a third time to clear.
Prices captured at the open on Tuesday, 22 September 2026. NIFTY spot at the open: 23,460. The highlighted row is nearest the money.
NIFTY closed at 23,329, down 131 points from the open. Sold 23,400 CE at ₹100.50 → settled ₹0.05. Bought 23,500 CE at ₹36.00 → settled ₹0.05. Net gain of ₹28.55 per unit, or +100% of what was put up. This was the expiry, so those closing prices are settlement values.
Why the payoff has a hole in it
Selling the 23,400 call brought ₹100.50 and buying two 23,500 calls cost ₹72.00, leaving a ₹28.50 credit. Below 23,400 nothing is exercised and the credit is kept.
Between the two strikes the sold call is in the money and the bought calls are not, so the position loses at the rate the index rises. That loss reaches its worst at 23,500, where the sold call is 100 points in the money and the long legs are still worthless — ₹71.50 after the credit.
Above 23,500 the two long calls gain at twice the rate the short one loses, so the position recovers and then rises without limit. The dip is not a flaw; it is where the extra long call has not started paying yet.
What it did
The index closed at 23,329, below every strike involved. All three calls settled at ₹0.05, and the structure kept ₹28.55 — the credit, less the rounding on the settlement ticks.
That outcome is also the one that looks least like the structure’s purpose. A back spread is built for the move above the upper strike, and this session never approached it. It was paid for waiting instead, which is what the credit is for.
Common questions
What is a call ratio back spread?
Selling one call and buying two or more calls at a higher strike. It profits from a large move up, keeps the credit if the underlying stays below the sold strike, and loses most in the band between the strikes.
Where does a ratio back spread lose money?
At the long strike, where the short leg is in the money and the long legs are not yet. For the 23,400/23,500 structure the worst case was ₹71.50 at 23,500.
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How these figures are produced
Every price on these pages was traded on the exchange and is read from our own option-chain capture, which records the NIFTY and SENSEX chains once a minute through the session. Each page names the session its figures come from.
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