Long Put Ladder
Description
A put ratio spread extended with a third, lower strike: buying a higher put and selling one put at each of two lower strikes.
Setup
- Buy one put at a higher strike.
- Sell one put at a middle strike.
- Sell one put at a lower strike, same expiry.
Context
Used when a decline down to the middle strike is expected, extending the profit plateau of a straight bear put spread by giving up more downside to collect more up-front credit.
Risk Profile
Maximum gain is reached between the lowest and middle strike. Below the lowest strike, the extra uncovered short put creates loss that grows as the underlying keeps falling.
Pros
- Wide plateau of maximum profit.
- Lower, or negative, cost of entry than a bear put spread.
- Benefits from time decay on the two short puts.
Cons
- Uncapped downside risk below the lowest strike.
- Needs active management if the underlying sells off hard through all three strikes.
Effect of Time
Time decay generally helps, since there are more short options than long ones.
Effect of Volatility
A rise in implied volatility generally hurts the position.
Look-Alike Strategies
Live Structure
| Position | Right | Ratio | Strike | Expiry | Premium | Fill Price | Est. Fee |
|---|---|---|---|---|---|---|---|
| Long | Put | 1 | $85000.0000 | 24 Sep 2026 | $633.2108 | $759.8530 | $25.3284 |
| Short | Put | 1 | $84500.0000 | 24 Sep 2026 | $278.6156 | $253.2869 | $25.3287 |
| Short | Put | 1 | $84000.0000 | 24 Sep 2026 | $105.5351 | $92.8709 | $13.1919 |
Estimated Cost to Assemble
An estimate of what entering this structure right now would really cost: filling every leg by crossing the spread (the ask when buying, the bid when selling) instead of at the mid-price, plus an estimated exchange fee. Real fees and fills can differ from this estimate.
Payoff & Greeks vs. Underlying Price
The Greeks curves are a Black-Scholes model using each leg's current implied volatility, holding time to expiry fixed -- not live exchange data at every price, which only exists at the current price (dashed line).
Payoff at Expiration
This structure's value and profit/loss at expiration, at a handful of specific prices: every leg's strike, every breakeven, the current spot, and the chart's own range.
| Underlying Price | Value at Expiration | Profit / Loss | Return on Cost |
|---|---|---|---|
| $83000.0000 | -$500.0000 | -$749.0601 | -300.8% |
| $83749.0601 breakeven | $249.0601 | $0.0000 | +0.0% |
| $84000.0000 | $500.0000 | $250.9399 | +100.8% |
| $84428.1100 current | $500.0000 | $250.9399 | +100.8% |
| $84500.0000 | $500.0000 | $250.9399 | +100.8% |
| $84750.9399 breakeven | $249.0601 | $0.0000 | +0.0% |
| $85000.0000 | $0.0000 | -$249.0601 | -100.0% |
| $86000.0000 | $0.0000 | -$249.0601 | -100.0% |