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+Chapter 11: Ratio Call Spreads 221 
+The ESP method is merely a confirmation of the other method. Either one 
+works well. The spreader should become familiar with the ESP method because, in 
+a position with many different options, it reduces the exposure of the entire position 
+to a single number. 
+TAKING PROFITS 
+In addition to defensive action, the spreader may find that he can close the spread 
+early to take a profit or to limit losses. If enough time has passed and the underlying 
+stock is close to the maximum profit point - the higher striking price - the spreader 
+may want to consider closing the spread and taking his profit. Similarly, if the under­
+lying stock is somewhere between the two strikes as expiration draws near, the writer 
+will normally find himself with a profit as the long call retains some intrinsic value 
+and the short calls are nearly worthless. If at this time one feels that there is little to 
+gain (a price decline might wipe out the long call value), he should close the spread 
+and take his profit. 
+SUMMARY 
+Ratio spreads can be an attractive strategy, similar in some ways to ratio writing. Both 
+strategies offer a large probability of making a limited profit. The ratio spread has 
+limited downside risk, or possibly no downside risk at all. In addition, if the long 
+call(s) in the spread can be bought with little or no time value premium in them, the 
+ratio spread becomes a superior strategy to the ratio write. One can adjust the ratio 
+used to reflect his opinion of the underlying stock or to make a neutral profit range 
+if desired. The ratio adjustment can be accomplished by using the deltas of the 
+options. In a broad sense, this is one of the more attractive forms of spreading, since 
+the strategist is buying mostly intrinsic value and is selling a relatively large amount 
+of time value.