Profit and loss on call ratio backspreads

[Bankroll]

Hi,

Quick intro, I'm interested in derivatives trading and have been studying for around 8 months with the view to starting a portfolio and investing (real money) in another 12 months or so.

I've been looking at these of late (paper trading) but have come across a glitch when trying to calculate the 2nd break even point where it has worked out less than the buy strike price (strike prices are only $1 apart), hence the P&L graph doesn't turn out as typically shown in many examples.

Can anyone help me with this? Do I need to look at different buy & sell strikes? or adjust the ratio? or is it just that the graph will not necessarily work in all cases?

Secondly, are there any groups which meet in the Sydney area, re this sort of stuff?

thanks in advance.

 

[Bankroll]

Ok seems I just need to play with the ratio.:

 

[boliu]

Hi,

Quick intro, I'm interested in derivatives trading and have been studying for around 8 months with the view to starting a portfolio and investing (real money) in another 12 months or so.

I've been looking at these of late (paper trading) but have come across a glitch when trying to calculate the 2nd break even point where it has worked out less than the buy strike price (strike prices are only $1 apart), hence the P&L graph doesn't turn out as typically shown in many examples.

Can anyone help me with this? Do I need to look at different buy & sell strikes? or adjust the ratio? or is it just that the graph will not necessarily work in all cases?

Secondly, are there any groups which meet in the Sydney area, re this sort of stuff?

thanks in advance.

Hi:
You are talking about trade back ratio or defending the spreads? there are two different issues? if I trade back ratio, normally is 50%, if you are defending spreads, 20% to 30%