Calendar Spread

C

clarodina

Trader trading calendar spread offers some suggestions?

Assume a trader put on a atm call calendar spread and and the prices fall to breakeven and the trader put on a double calendar

Should the original calendar spread be closed or let both trade?
 
Double calendars are death. You're increasing your size. You're doubling your gamma (nearly). You're f*cked if spot trades beyond either strike. Then you're sitting on a DOTM worthless calendar, and likely losses to D/G on the other.

Don't trade ATM C AND P calendars. They are equivalent and will simply 2x your exposures.
 
Please clarify why you advise against calendars. Do you not have the same exposure, from a PnL perspective, similar as a straddle?
 
You must log in or register to reply here.
Back
Top