Ratios involve buying or selling a greater number of calls or puts on one side of the transaction than the other. They are basically a combination of strategies already discussed and are useful in certain situations.
Simply stated, a ratio write involves selling a greater number of options than the underlying futures position, with the most common being 2.
For example, it's September 15 and you buy December cotton at 8055, and you simultaneously sell two December 86 calls for a premium of 130 each. You are taking in 260 points in premium. (For cotton, one point is worth $5.) Therefore, this strategy gives you $1,300 in downside ...