Can there be negative loss and positive profit in some options spread orders?

Question

I am mentioning about the risk rewards ratio.

Answer 1

A negative loss is a profit.

If you are asking if both legs of a two legged spread can generate a profit, the answer is yes. Here is an example:

On April 15 I opened a CROX Diagonal Put Spread

Bought 10 Sept. $20 puts @ $9.80

Sold 10 April $10 puts @ $0.40

The April $10 puts expired, realizing a profit of $0.40 per share.

I sold the Sept. 20 puts for $10.00 realizing a profit of $0.20 per share.

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I am not sure why you mentioned the risk reward ratio. If you are asking if you can open a spread that has a positive reward and no risk, the answer is "no" unless you do not include carrying costs when calculating the return from the spread. For example, you can frequently buy a stock and use long-term options to establish a synthetic short stock position, creating a risk free profit. However, the profit will be less than the risk free interest rate, so you would have made more money by buying United States Treasury debt.

Answer 2

Using proper spread order can generate 20% profit and 9% lost. Which I think is fair enough.