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Up, down, all around and for the trifecta, maybe it goes nowhere :)

Mark posted a good explanation as to why a backspread is a poor choice for hedging long stock. In insurance terms... 1) You can buy good protection (high cost, low deductible) 2) You can buy poor insurance (low cost, high deductible) 3) You can add riders that alter (1) and (2)...

"It's time to organize an expedition to find Big Foot" By any chance is he nicknamed weewilly? :)

It's time to organize an expedition to find Big Foot :)

Even if you find a situation where market forces have made put premiums higher than call premiums, trying to protect short stock with a call backspread is just as bad an idea.

Combo is short for combiination which could be any number of strategies. You might want to be a bit more specific about what strategy you are referring to. And if you don't know the specifics of what options make up a long combo strategy, what would be the point of knowing its breakeven points?

Adding short OTM calls to your backspread would mildly offset some of the risk of the backspread. But to repeat, I think the put backspread idea does a poor joib of protecting long stock.

If the call has time premium remaining, it's very unlikely that you'll be assigned. And if you are, take the money and run much sooner than you should have :)

Yep, a backspread is a lower cost way to hedge long stock but it's going to have a much larger risk loss potential to the downside, perhaps as much as 3 strikes because you have 100 delta loss on the falling underlying plus higher delta loss on the strike sold versus that of puts bot. Since...

------------------------------------------------------------------- Quote from acen1975: no,he ask about his covered calls! and even if we take only the calls,they should be winners on themselfs too...... if we dont count the delta move you dont need to be a rocket scientist to figure it...

That's such a minor detail!

Yep, that be true except that he's no longer offering rope to one specific poster :D For me, last year was a bonus year for outright trading. None of that IV related wussy stuff :)

No need to stop asking questions or go away. My apologies for not being more specific. We've been knocking several things around and they've sort of run together at times. The 15 BP's of IV is for pairing the backspreads not for double reverse calendars (with one and a half turns :)

It's important because you can take positions based on a pricing assumption when in reality, it's the wrong assumption.

thebubs - The question is, do fairly priced call calendars perform the same (equivalence) as fairly priced put calendars of the same month/strike? Due to market forces, at any given time, market prices for one can be higher or lower than the other (not theoretical). In your case it's...

Surprice! Surprice! MM's were very generous today! :)

The simple answer is yes... unless it went ex-div this AM

There's no way to tell you that it wil or won't work. It might, it might not. Whether I would take the bet would depend on the risk graph and the relative positioning of the components to each other, to historical, etc. You won't know until you model it (umteenth + 1).

I don't mean to speak for bebpasco but if my recollection is correct, we both said HUH? when we first read about reverse calendars on Yahoo 4-5 years ago, courtesy of IV_Trader. It made no sense then and yet they do. And to add minimally to what beb said, legging out the AM after the EA is...

Yes, pre earnings you would expect the gap between the front month and the far month to increase. But that's not a good reverse candidate unless the IV of later months increases as well. Regarding buying more front month, in general, if it has increased so much, why would you want to buy a...