Put Backspread

Directional

Sell 1 higher put, buy 2 lower puts.

Performance across all datasets

SymbolReturn %SharpeMax DD %Win %Avg/trade %Trades
SPY-2722.8%-0.53+2622.8%+5.3%-143.3%19
QQQ-2378.6%-0.91+2126.8%+5.3%-125.2%19
IWM-3336.3%-0.35+3277.9%+10.5%-175.6%19
DIA+564.6%0.14+852.4%+89.5%+29.7%19
Avg-1968.3%-0.41+2220.0%+27.6%19
Cumulative P&L % — all symbols
Detail:
Cumulative P&L % — SPY

Risk Profile

Max Profit
Large downside
Max Loss
Between strikes
Breakeven
Depends on entry credit/debit
Outlook
Bearish with vol expansion

Parameters

ParameterDefaultDescription
ratio1x2Short/long put ratio

Methodology

Backspread for downside convexity; profits in sharp selloffs and often carries limited upside risk.

Implementation

# -P(K1) + 2P(K2)