What are Options Ratio Backspreads? An Options Ratio Backspread is a complex, multi-leg options strategy that involves buying a greater number of options contracts at a lower strike price and selling a smaller number of options contracts at a higher strike price. The backspread is also known as a "bull call spread," because it is typically used when the trader expects the underlying asset to increase in price. The backspread strategy is designed to profit from a rise in the price of the underlying asset. If the asset's price increases, the value of the long options at the lower strike price will increase more rapidly than the value of the short options at the higher strike price, resulting in a profit for the trader. If the asset's price remains flat or declines, the trader may incur a loss. Options Ratio Backspreads can be used with stocks, index options, and other types of options. They can be used to speculate on the direction of the underlying asset's price, or to hedge against potential price movements. It is important to note that backspreads involve a significant amount of risk, as the potential loss is unlimited if the asset's price declines significantly. Related articles What is the difference between At-the-Money, In-the-Money and Out-of-the-Money Options? What is a Strip Strangle and a Strip Straddle? What is an Inverted Iron Condor?