Put Front Spread

Directional

Buy 1 higher put, sell 2 lower puts.

Performance across all datasets

SymbolReturn %SharpeMax DD %Win %Avg/trade %Trades
SPY-1336.5%-0.83+1236.5%+10.5%-70.3%19
QQQ-1421.6%-1.35+1415.0%+10.5%-74.8%19
IWM-1631.2%-1.25+1531.2%+10.5%-85.8%19
DIA-1123.4%-0.64+1023.4%+15.8%-59.1%19
Avg-1378.2%-1.02+1301.6%+11.8%19
Cumulative P&L % — all symbols
Detail:
Cumulative P&L % — SPY

Risk Profile

Max Profit
Near lower short strike
Max Loss
Large downside
Breakeven
Depends on entry credit/debit
Outlook
Mildly bearish / short vol

Parameters

ParameterDefaultDescription
ratio1x2Long/short put ratio

Methodology

Front spread is the inverse of put backspread; short convexity profile.

Implementation

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