This strategy is used when an investor believes a stock is going to make a move higher. It is a variation of the ratio spread, so a significant upward move in the stock price will result in a very large loss due to the extra short call. The staggered strike prices for the written calls in the Christmas tree strategy reduce the amount of loss incurred when the share price rises more than expected, unlike the ratio spread, where the call options have the same strike.
♢
in Christmas-tree order - воен. жарг. в полной походной выкладке; ≅ увешанный как ёлка1. рождественская ёлка
2. разг. световое табло с разноцветными лампочками
♢ in Christmas-tree order - воен. жарг. в полной походной выкладке; ≅ увешанный как ёлка
Англо-русский строительный словарь. — М.: Русский Язык.С.Н.Корчемкина, С.К.Кашкина, С.В.Курбатова.1995.