How to Trade the Ratio Spread: Smart Crypto Options Strategy on Delta Exchange

Markets don’t always shift the way you expect. One moment you’re seeing signs of a breakout, and the next moment, prices may swing in the opposite direction. But that does not stop the traders from exploring the market. With young traders actively trading and exploring new crypto derivatives trading strategies, the crypto market in India is booming. 

With more than two crore crypto users in the country, the big question is often the same – how do you build a strategy that works well even during volatility? This is where the ratio spread options strategy comes in.

But strategy alone isn’t enough. 

A lot depends on where you’re trading. In a space where speed and trade execution matter, picking the right platform is also equally important. Delta Exchange has steadily become a go-to choice for many active traders due to its reliability and ease of use. 

In this post, we’ll discuss what is ratio spread in options and when and how to use this strategy with Delta Exchange. 

What is Ratio Spread in Options?

A ratio spread options trading strategy is where you buy one option and sell two or more of the same type of contracts (calls or puts options) with different strike prices. With ratio spreads, you can profit if the asset lands within the ideal range, while limiting losses if it moves beyond.

For example, in a call ratio spread, you’d buy one at the money (ATM) or out of the money (OTM) call and sell two further OTM calls. The goal is to profit from the difference in premiums while keeping risk relatively controlled. This strategy works best in slightly directional crypto markets, offering a balance between limited downside and solid upside. 

If you’re looking to execute a ratio spread options strategy, Delta Exchange is the best crypto exchange platform to start with. Delta recently hit a new milestone with $4+ billion in daily trading volume. The platform’s ability to handle high-frequency trades, maintain liquidity, and adhere to strong compliance standards makes it an ideal space to execute ratio spreads with precision. 

How to Set Up a Ratio Spread on Delta Exchange

Setting up a ratio spread in crypto options on Delta Exchange is simple once you know your way around the interface: 

1. Log in to your Delta Exchange account.
2. Go to the crypto options segment – as ratio spread is a crypto options trading strategy, and this is where the action begins.
3. Turn on the Strategy Builder to create your strategy and analyze the payoff graph.
4. Select the expiry date, based on your goals and risk profile, to start building your position.
5. Now enter the legs of your ratio spread. Since it’s being built on both sides (verticals), you’ll be creating multiple legs (call or put options contracts) for each direction.

Source | The Delta Exchange app on your Android or iOS device

You can also download the Delta Exchange app for real-time visibility into your potential outcomes and to analyze the legs while creating a ratio spread options strategy. To navigate the market more efficiently, you can also practice using a demo account.

How to Analyze the Payoff Chart?

Once you’ve set your expiry and enabled the Strategy Builder on Delta Exchange, you can start building your ratio spread on both call and put sides, depending on your risk exposure.

Let’s simplify this with an example. In this case, let’s consider weekly expiry for BTC options – June 5, 2025.

Setting up a call ratio spread in crypto options:

• Buy 1 call option at the $85,000 strike price (around $700 premium)
• Sell 2 call options at $88,500 strike price (around $325 premium each)
• Ratio applied: 1:2
• Lot size: 100 (buy) vs. 200 (sell)

Similarly, 

Setting up a put ratio spread options strategy: 

• Buy 1 put at $72,000 strike price (around $660 premium)
• Sell 2 puts at 69,000 strike price (around $360 premium)
• Ratio applied: 1:2
• Lot size: 100 (buy) vs 200 (sell)

The total order margin here will be approximately $145, and you can analyze the payoff chart in detail.

The payoff chart will show you two distinct peaks – also known as the “Batman pattern.” 

Source | Ratio spread in crypto options – Payoff chart analysis (Batman pattern)

Here’s how to understand this chart: 

• If the market moves beyond the $85,000 strike price, your call side starts making money.
• If it drops below $72,000, your put side gains.
• If the market reaches around $69,000 or $88,000, you can expect a peak profit of around $350.
• The call ratio spread breakeven is shown at $91,000 to $92,000. Therefore, if the market exceeds that, you will incur losses.
• Similarly, the breakeven on the downside (put) is around $66,000, and if the price drops below this value, you will be at a loss.

How to Minimize Risks? A Few Tips

While ratio spreads are a smart and quite profitable crypto options trading strategy, they aren’t without risks. Here are a few tips to remember:

• Adjust risks to suit your comfort: Choose strikes farther from the ATM for safety, or closer if you’re willing to take more risk.
• Book profits early: Lock in gains when you hit 1/3rd or half of the maximum profit (~$350 in the above example).
• Exit when short strike nears ATM: If 88,500 (call leg) or 69,000 (put leg) becomes ATM, it’s time to exit.
• Set stop-losses: You can set up stop-loss orders on Delta Exchange to help protect you if the market moves beyond breakevens (beyond $92K or below $66K in the above example).

Final Thoughts on Ratio Spread in Crypto Options Trading

The ratio spread is a smart options trading strategy to use when you expect market volatility – but not a one-sided move. If you think the market might swing sharply in either direction but eventually settle within a range, this strategy might work well. 

Platforms like Delta Exchange make executing crypto option trading strategies easier. With INR settlements, FIU registration, affordable lot sizes, and automated trading bots, the platform is built to support both beginners and advanced traders exploring crypto options and futures.

Want to start crypto options trading? Visit the website at www.delta.exchange to sign up and join the community on X for all the latest updates. 

Disclaimer: Crypto trading carries inherent risks due to its high volatility. Kindly do your own research and consult the experts before making any investment decisions.