for a stock with high IV and high premiums, and that i would want uncapped profits. would a call ratio back spread make sense to help reduce cost of high premium? i am bullish on the stock movement
sell one ITM call
buy 2 OTM calls
does this make sense for short squeeze stocks?
thanks
Posted by the_gorf
1 Comment
I’d probably go the more typical route of buy 2 ITM, sell 1 OTM. With your method there’s more risk of early assignment on the short leg while the long legs remain OTM, especially if the stock is hard to borrow.