Calendar Spreads

Quote from tuwood:

After doing a lot of digging & playing out different scenario's I will most certainly close out my LEAP after my MAR option's expire (hopefully worthless) :D
I do like the idea of buying the APR/JUN after next friday & roll it to May. This is essentially the same thing I'm doing with my LEAP now, but with significantly less money (& risk) tied up in the trade & a much greater profit percentage possible.

Thanks for pointing me in the right direction. :)
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I don't know if it is the RIGHT direction or not but I have learned there are many different ways to fish...HOW you manage the trade you put on is far more important than the initial trade...good luck...:)
 
This is more in the category of ....note to myself...
On 3/3 I opend a Mar/Jun 30/25 put diag on CREE...partly because there was so little premium on the March 25 (or even Apr 25 ) put...hoping CREE would stay above 30 thru Mar after which my plan was to drop down to Apr 25..at the time net debt was only .05

Today Cree dropped and I felt I needed to amend the trade...ended up rolling, probably prematurely, down with a net debt of 1.10 for my new CREE Apr/Jun 25put cal. The problem is that CREE is a hard to borrow stock and didn't have a 27.5 strike. I felt the stock was overpriced and should have just bought the June 25 put...still trying to find my way in doing Calendars but in a fairly low priced stock 5 pt spreads make slightly OTM cal's difficult if not impossible to do...so in the future don't:D

It still may work out (in that I don't lose money) however today you could do an Apr/Jun CREE 25 put cal for only .35 far less than my 1.10 I'm stuck with...
 
Just an update on my LEAP calendar spread. I was able to sell both ends of it yesterday for a gain of .10 overall.
Once I better understood the risk picture of that position I wasn't very comfortable with it. :confused:
I feel I can put on spreads with the same profit potential with significantly less risk using nearer term calendar spreads.
Another lesson learned, but fortunately this one didn't cost me anything.

I'm looking at a few near term spreads & will let you know what I get into. Still looking at the QQQ's of course. :)
 
Thanks Tuwood will be looking forward to it.

Closed my WFMI Mar/Apr cal...credit received $4.90...existing debt was 2.75 so on the original 10 contracts profit was $2150...however booked a loss on the 10 contracts I sold (trying an adjustment) at $800. so net net is only $1350 a 55% return in two months. NOT including commission

clearly I could of should of managed this trade better. If I had just bought and held the 72.5 put I would have made about $5225 on the option (currently the May 72.5 put is 9.75 and I bought it for 4.5)....

The selling of double th number of contracts at 65 for March also was a good play because they are about 1.5 less (now) than what I paid for them but I chickened out. Next time if I chose that adjustment I will stay the course.

FINALLY I woke up this am wonderin....what about turning the existing diagonal into a B-Fly for april. I would basically have the B-fly paid for but would there be a greater potential profit. Does anyone out there ever do this...on the final roll instead of closing it create a B-fly?

Also has anyone else considered or have done what I did in terms of rolling UP from May to April the long put? Is that a smart thing...stupid thing...or just an adjustment or way of booking gains?
 
Quote from tuwood:

Just an
I'm looking at a few near term spreads & will let you know what I get into. Still looking at the QQQ's of course. :)
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you mentioned you like the QQQ's over individual equities because of event risk. However isn't the likelyhood of event risk priced in or in the IV's therefore if you chose lower IV stocks then you have less risk? Also if your only 90-120 days out perhaps less risky than 6mo-12mo.
 
Quote from DonnaV:

you mentioned you like the QQQ's over individual equities because of event risk. However isn't the likelyhood of event risk priced in or in the IV's therefore if you chose lower IV stocks then you have less risk? Also if your only 90-120 days out perhaps less risky than 6mo-12mo.
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You're probably right, but I've only been doing this for about a year and I unfortunately managed to lose my A$$ the first 6 months to the tune of almost $20k mostly trying to swing trade equities & getting bit by things I didn't understand at the time. IV drop's, earnings suprises, etc... (expensive lessons) :confused:
I should write a book on how not to swing trade. hehe.

So, I guess trading the QQQ's is kind of like leaving the training wheels on because IMOH there are fewer variables to follow.. :D I am doing fairly small spread ($500 max risk) positions to see how they pan out. Once I get more comfortable with calendar spreads I'll take the training wheels off & venture out to the equities. :cool:
 
Quote from tuwood:

You're probably right, but I've only been doing this for about a year and I unfortunately managed to lose my A$$ the first 6 months to the tune of almost $20k mostly trying to swing trade equities & getting bit by things I didn't understand at the time. IV drop's, earnings suprises, etc... (expensive lessons) :confused:
I should write a book on how not to swing trade. hehe.

So, I guess trading the QQQ's is kind of like leaving the training wheels on because IMOH there are fewer variables to follow.. :D I am doing fairly small spread ($500 max risk) positions to see how they pan out. Once I get more comfortable with calendar spreads I'll take the training wheels off & venture out to the equities. :cool:
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on vacation...but taking computer with...see what you mean. Swing trading equities is very difficult NO one ever KNOWS where a stock or mkt is going for sure. The great thing about options is DEFINED risk and within that framework you can always manage to perhaps improve the odds with adjustments. Like calendar spreads, as long as IV is relatively stable you most likely won't risk the max you've put down (because of rolls). The only thing I don't like about them is that it does seem to be very commission intensive. With the wayOTM IC that I do on the spx I usually don't close the spreads if the index is over 20 pts away from my shorts...also I'm making much more on that trade than what I'm doing on the calendars. Paying commission is ok when you are making money but boy when a trade goes wrong its like rubbing salt into your wounds :(

BTW I do have an interesting trade on GCI. Last thurs did a put cal on then almost closed it on fri. Decided over the weekend that I would do a call cal so I will be doing a double calendar. I'll put in the specifics later (after all I AM on vacation :D) but talk about your commission intensive spread...ugh :mad: :eek:

I will say that I've looked much more closely and have really LEARNED more about IV and vega doing calendar spreads...so I guess commish is tuition.
 
Quote from DonnaV:

on vacation...but taking computer with...see what you mean. Swing trading equities is very difficult NO one ever KNOWS where a stock or mkt is going for sure. The great thing about options is DEFINED risk and within that framework you can always manage to perhaps improve the odds with adjustments. Like calendar spreads, as long as IV is relatively stable you most likely won't risk the max you've put down (because of rolls). The only thing I don't like about them is that it does seem to be very commission intensive. With the wayOTM IC that I do on the spx I usually don't close the spreads if the index is over 20 pts away from my shorts...also I'm making much more on that trade than what I'm doing on the calendars. Paying commission is ok when you are making money but boy when a trade goes wrong its like rubbing salt into your wounds :(

BTW I do have an interesting trade on GCI. Last thurs did a put cal on then almost closed it on fri. Decided over the weekend that I would do a call cal so I will be doing a double calendar. I'll put in the specifics later (after all I AM on vacation :D) but talk about your commission intensive spread...ugh :mad: :eek:

I will say that I've looked much more closely and have really LEARNED more about IV and vega doing calendar spreads...so I guess commish is tuition.
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I've been doing a lot of research on the IC's as well. I'm playing with them in my virtual account & have had pretty good success.
Then again, almost everything works great in my virtual account. :D
 
Quote from leonnis:

1.)buy .naysx/sell .naypx
debit 0.15

2.)roll .naysx to .naytx on 4/18/2006(report earnings)

what you think?
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Whats the underlying stock symbol..also what are the greeks?
 
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