Max profit = spread (differennce between two strike) + net credit (when you create the spread)
Breakeven = lower strike price - max profit.
For example, a 300/290 (1:2) put spread with a credit of $5 (300 put cost $9, and 290 put cost $7), its max profit is $10+$5=$15, and breakeven is 290-15=275
If taking stock loss into consideration too, then 300 to 290 drop is fully protected, breakeven in this case would be 287.5 (ie, $2.5 of the $5 credit protects further stock drop from 290 to 287.5, and another $2.5 of the $5 credit protects the stock that is assigned to you at 290). So, net net, you are protected with $12.5 drop with zero cost. Even better, if you intend to hold stock anyway and dont mind temporary drop, then you are essentially buying more shares at 275 (of course, you lose protection on the existing shares)
If you buy put directly, you pay $9 premiums, and it would only make sense if stock drops to 300-(9+12.5) or lower.
Basically, if you expect stock to drop a lot, ratio put spread is NOT a good idea. But if stock drops modestly, it cuts down the cost a lot.
