Quote from DonnaV:
sleepless nite on WFMI
yesterday stock retreated another 1$ + inspite of an up market.
Not looking good and my attempt to ratio is looking worse.
I've put pencil to paper this am:
As of 2/11 net debt to establish the Calendar was $3100
Rolled the Long May 70 to Apr for credit of 2600
_____
net debt 550
Adjustments...selling 20 Mar 65 credit 5400
buying back the short Mar 70 debt 7200
_____
current net debt 2750
Value of current ratio diag..............................-7400 (short 20 65)
+8450 (Long 10 70..
net value is -1005
Two choices...can buy back 10 of the March 65 shorts but cost would be about 3730....and if I roll March 65 to April creating a bear put on the other 10 contracts I will only net a max of 5000 (not including credit for the roll)...so after commissions the only positive value in this whole transaction would be the credit on the roll of the 10 Mar 65 which is unknown at this point.
Second choice at this point is to close the whole thing for a loss of -1005 or so.
I did think of possibly doing a Bear Call Mar 65/70 10 contracts but credit would only be .50 or $500 creating a kind of Iron B-Fly
perfect only if WFMI ends up at 65 at march exp. not really wild about it.
What is more annoying than losing money is being RIGHT on my call (WFMI would drop) AND YET LOSING money
Calendar Spreads
- Thread starter gatorplease
- Start date
I'm bringing back my WFMI trade because I discovered I've made what I think is a BIG boo boo
I don't know what fuzzy math I used to come up with a profit on the trade. My TOS statement showed a loss of $950 so I've gone back to re-eval the trade:
1/5 +10 WFMI May 72.5 P -4.5
-10 WMFI Feb 72.5 P +2.05.......net -$2450
2/9 -10 WFMI Mar 70 P +3.3
+10 WFMI Feb72.5 -4.00........net -$700
2/21 +10Mar 70 P -7.20.....net -7200
- 20 Mar 65P +2.7..... net +5400
+10 Mar65P -3.5......net -3500
-10 May72.5P +10.0
+10 Apr 70.p -7.4.......net +2600
3/10 closed Feb/Apr 10 P.................net + 4900
cost of comm $125
Net LOSS...................$1075
a far cry from the profit I reported
I'll have to go thru the posts to see where I made my error but looking at the trade ( which I really mangled since the stock did tank I should have MADE money) I see now that rolling the May 72.5 put to April 70 was NOT a good choice. Also as I said before selling the 20 march 65's were a good decision but I chickened out and bought back 10 of them for a loss of $800
1/5 +10 WFMI May 72.5 P -4.5
-10 WMFI Feb 72.5 P +2.05.......net -$2450
2/9 -10 WFMI Mar 70 P +3.3
+10 WFMI Feb72.5 -4.00........net -$700
2/21 +10Mar 70 P -7.20.....net -7200
- 20 Mar 65P +2.7..... net +5400
+10 Mar65P -3.5......net -3500
-10 May72.5P +10.0
+10 Apr 70.p -7.4.......net +2600
3/10 closed Feb/Apr 10 P.................net + 4900
cost of comm $125
Net LOSS...................$1075
a far cry from the profit I reported
I'll have to go thru the posts to see where I made my error but looking at the trade ( which I really mangled since the stock did tank I should have MADE money) I see now that rolling the May 72.5 put to April 70 was NOT a good choice. Also as I said before selling the 20 march 65's were a good decision but I chickened out and bought back 10 of them for a loss of $800
must have been the vodka tonic's:eek:
not sure what mad dog is...but in going thru my post realized that they were not well constructed too much rambling inbetween the numbers. in the future will be much more discrete and concise with the numbers as in the above posting then if I want to rant do in in a new paragraph...may be mad dog WOULD help to figure out my errors
one more edit...so that I said on Mar closed the Apr/may 10 put of course meant the 70 put...10 contracts
one more edit...so that I said on Mar closed the Apr/may 10 put of course meant the 70 put...10 contracts
Quote from DonnaV:
not sure what mad dog is...but in going thru my post realized that they were not well constructed too much rambling inbetween the numbers. in the future will be much more discrete and concise with the numbers as in the above posting then if I want to rant do in in a new paragraph...may be mad dog WOULD help to figure out my errors
one more edit...so that I said on Mar closed the Apr/may 10 put of course meant the 70 put...10 contracts
so how you did so far with calendars ? Will you continue to trade them ?
IV...I still do like them a lot. The three that I have been Journaling..RMBS, WFMI, and SHDL have so far been one win, one loss (because of poor management) and one still to be determined. i've opened several others that I have not shared and they seem to be doing ok...won't know for several months.
What I like about calendars in addition to the fact they require no margin is there does not seem to be that much risk in the type of market we have been experiencing the last few years...fairly low vol..sometimes slightly increasing. Bottem line is that I expect that on stocks that are kinda high priced like IBM, BG, CL PG and others...this might be a very viable strategy. (I don't mean High in the sense that they are over priced but high in the $$ to buy the stock...cheaper to play the stock but as an IC or cal)