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Ratio Put Spread
directional Uncapped riskAdvanced: profit from a moderate, measured drop.
⚠ Negative expectancy in backtests — taught as an advanced concept, excluded from income picks.
When to use it
Sell 1 put, buy 2 lower puts. Profits from a moderate decline but carries downside risk below the long strikes. Advanced only.
Max profit
Near the long strikes at expiry.
Max loss
Significant below the long puts.
Payoff at expiry
illustrative shape — not to scale
■ profit zone
■ loss zone
X axis = stock price at expiry →
How it's built
Strikes shown low→high. Sell = collect premium · Buy = pay premium for protection or upside.
Hermes-evaluated setups
High-conviction per-ticker applications — setups with a confidence-adjusted win rate ≥ 80% over ≥20 backtested trades (95% lower bound — honest for the sample size, never a raw 100%). Avg P/L is the mean profit/loss per one-contract position.
| Ticker | Win Rate | Avg P/L / contract | Sharpe | Trades | DTE |
|---|---|---|---|---|---|
| GEV | 89% | +$714.00 | 5.3 | 31 | 17 |
| NBIS | 81% | +$352.00 | 2.2 | 34 | 11 |
| RDDT | 80% | +$313.00 | 2.0 | 55 | 9 |
| COST | 92% | +$286.00 | 5.0 | 42 | 43 |
| PL | 90% | +$51.00 | 2.6 | 51 | 24 |
| CIFR | 89% | +$41.00 | 3.2 | 31 | 44 |
| UMAC | 89% | +$34.00 | 4.3 | 31 | 18 |
| KOPN | 86% | +$17.00 | 1.7 | 80 | 22 |
| WT | 80% | +$10.00 | 1.3 | 81 | 10 |
Backtested results are not a guarantee of future performance.