Reverse Call Spreads Tweet
Reverse Calendar Call Spread:
- Sell long term call, buy a shorter term call at same strike
- Makes profit if either stock price moves significantly or
- Makes profit if IV shrinks
Reverse Ratio Call Spread (Backspread):
- Sell a call at a strike, buy more calls at a higher strike
- Credit spread
- If the stock rises, profit is from the calls bought
- If the stock drops, all calls expire worthless. Initial credit is the profit.