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Corrections to Ratio Spread figures I think

by Darren
(Los Angeles)

Just think that the figure 600 should be 60 above. I have made this technique work before. However, I was doing a 2 to 1 ratio. i.e. selling 1 for every 2.

Editorial Comment

Thanks for this observation Darren, but this particular index (the XJO in Australia) at the time was based on 1,000 underlying per 1 contract and not 100 as in the USA. So $600 cost is about right.

Things have changed since then, because since June 2011 the Aussie options markets have now come more into line with the US in terms of "number of shares per options contract" - possibly due to rising share prices and the need for greater flexibility in order to be internationally competitive.

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