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Variable Ratio Write

Variable Ratio Write

What is 'Variable Ratio Write'

An option strategy in which an investor holds a long position in the underlying asset and writes multiple call options at varying strike prices.

Variable ratio writes have limited profit potential because the trader is only looking to capture the premiums paid for the call options. This strategy is best used on stocks with limited volatility.

Explaining 'Variable Ratio Write'

In ratio call writing, the ratio represents the number of options sold for every 100 shares owned in the underlying stock. This strategy is similar to a ratio call write, but instead of writing at-the-money calls, the trader will write both in the money and out of the money calls.

For example, in a 2:1 variable ratio write, the trader will be long 100 shares of the underlying stock. Two calls are written: one is out of the money and one is in the money. The payoff in a variable ratio write resembles that of a reverse strangle.


Further Reading

Determinants of financial performance in Chinese bankingDeterminants of financial performance in Chinese banking
www.tandfonline.com [PDF]
… Max. Obs. Panel A: Dependent variable. EVA, Economic value added, −0.149, 0.233, −2.634, 1.034, 342 … NIM, Net interest margin (%), 2.393, 0.818, 0.420, 6.680, 342. Panel B: Independent variables and instruments. CI, Cost to income ratio (%), 52.175, 16.081, 22.320, 165.050 …

Ability of accounting and audit quality variables to predict bank failure during the financial crisisAbility of accounting and audit quality variables to predict bank failure during the financial crisis
www.sciencedirect.com [PDF]
… Max. Obs. Panel A: Dependent variable. EVA, Economic value added, −0.149, 0.233, −2.634, 1.034, 342 … NIM, Net interest margin (%), 2.393, 0.818, 0.420, 6.680, 342. Panel B: Independent variables and instruments. CI, Cost to income ratio (%), 52.175, 16.081, 22.320, 165.050 …

The determinants of banks' profits in Greece during the period of EU financial integrationThe determinants of banks' profits in Greece during the period of EU financial integration
www.emerald.com [PDF]
… Max. Obs. Panel A: Dependent variable. EVA, Economic value added, −0.149, 0.233, −2.634, 1.034, 342 … NIM, Net interest margin (%), 2.393, 0.818, 0.420, 6.680, 342. Panel B: Independent variables and instruments. CI, Cost to income ratio (%), 52.175, 16.081, 22.320, 165.050 …

What is happening to the impact of financial deepening on economic growth?What is happening to the impact of financial deepening on economic growth?
onlinelibrary.wiley.com [PDF]
… Max. Obs. Panel A: Dependent variable. EVA, Economic value added, −0.149, 0.233, −2.634, 1.034, 342 … NIM, Net interest margin (%), 2.393, 0.818, 0.420, 6.680, 342. Panel B: Independent variables and instruments. CI, Cost to income ratio (%), 52.175, 16.081, 22.320, 165.050 …

Predicting returns with financial ratiosPredicting returns with financial ratios
www.sciencedirect.com [PDF]
… Max. Obs. Panel A: Dependent variable. EVA, Economic value added, −0.149, 0.233, −2.634, 1.034, 342 … NIM, Net interest margin (%), 2.393, 0.818, 0.420, 6.680, 342. Panel B: Independent variables and instruments. CI, Cost to income ratio (%), 52.175, 16.081, 22.320, 165.050 …

Economic consequences of SFAS 142 goodwill write‐offsEconomic consequences of SFAS 142 goodwill write‐offs
onlinelibrary.wiley.com [PDF]
… Max. Obs. Panel A: Dependent variable. EVA, Economic value added, −0.149, 0.233, −2.634, 1.034, 342 … NIM, Net interest margin (%), 2.393, 0.818, 0.420, 6.680, 342. Panel B: Independent variables and instruments. CI, Cost to income ratio (%), 52.175, 16.081, 22.320, 165.050 …

How does financial pressure affect firms?How does financial pressure affect firms?
www.sciencedirect.com [PDF]
… Max. Obs. Panel A: Dependent variable. EVA, Economic value added, −0.149, 0.233, −2.634, 1.034, 342 … NIM, Net interest margin (%), 2.393, 0.818, 0.420, 6.680, 342. Panel B: Independent variables and instruments. CI, Cost to income ratio (%), 52.175, 16.081, 22.320, 165.050 …

Macro-financial linkages in Egypt: A panel analysis of economic shocks and loan portfolio qualityMacro-financial linkages in Egypt: A panel analysis of economic shocks and loan portfolio quality
www.sciencedirect.com [PDF]
… Max. Obs. Panel A: Dependent variable. EVA, Economic value added, −0.149, 0.233, −2.634, 1.034, 342 … NIM, Net interest margin (%), 2.393, 0.818, 0.420, 6.680, 342. Panel B: Independent variables and instruments. CI, Cost to income ratio (%), 52.175, 16.081, 22.320, 165.050 …


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WCAG 2.0

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