Nice...i too am waiting for after earnings to roll my longer (exp is like Jul) cal's...so far I'm doing ok but we will see what earnings bring.
Calendar Spreads
- Thread starter gatorplease
- Start date
Nice...i too am waiting for after earnings to roll my longer (exp is like Jul) cal's...so far I'm doing ok but we will see what earnings bring.
Yes. Provided that AMD does not move too far away. I did not have very acurate past IV data though.
Quote from tuwood:
I jumped in on the AMD apr/may 35 in my virtual account. Just so I understand what you guys are thinking; You're waiting for the volatility to drop on the near month and then close the trade?
Sorry for the dumb question
Quote from tuwood:
I jumped in on the AMD apr/may 35 in my virtual account. Just so I understand what you guys are thinking; You're waiting for the volatility to drop on the near month and then close the trade?
Sorry for the dumb question
Not a dumb question. Better to ask and use a virtual account than not ask and pay tuition to the market.
I either close a spread if it's ATM or ITM a few days before exp, or let the short option expire and then sell the long option.
I'm trying to keep it simple for now until I get more experienced with this strategy.
Was contemplating this calendar, wanted to know what you guys thought:
RAD 5 May/Jan 07 Call @ .40
Vol: May = 50%, Jan = 40%
Historic Imp. Hi/Low 93/30
BE: 3.90 - 6.70
Slightly Bullish on RAD, will sell calls for 1 or 2 months, if stock goes ITM, I may just hold the long call. If not, will consider closing entire position
??
RAD 5 May/Jan 07 Call @ .40
Vol: May = 50%, Jan = 40%
Historic Imp. Hi/Low 93/30
BE: 3.90 - 6.70
Slightly Bullish on RAD, will sell calls for 1 or 2 months, if stock goes ITM, I may just hold the long call. If not, will consider closing entire position
??
Rite aid...interesting. The only problem with low priced stocks is that you leave yourself no wiggle room...to do a diagonal if needed to continue to catch premium. besides the 5 all you have is 2.5 or 7.5 and that is not easy to manage. You are asking the stock to trade between 4.5-5.0 for a couple of months then you'll have your option paid for and can go for the ride hopefully up. hopefully it will play out. as long as you stay in the calendar the worst that can happen is you lose your 40 cents. And if you are correct then you could easily double or better your money. The last thing that can happen is the stocks goes to 6$ by May and your short call is way in the money and your Jan call hasn't kept up and you'll be very unhappy you just didn't buy the damn call
those are all the possibilities. GLadding a little more thought to my comments. you said you were slightly bullish, so you might consider ratio spreading ie. if you were planning to do 10 contracts then do 10 long Jan's and 6 short May and see how that goes...that way if the stock does go up faster than you thought it might you'll be happy and buy selling 6 short if it doesn't then you have worked down the debt of the trade.
I've been kinda watching RAD for a little bit and its been stuck in the $4 region forever. I'm not overly worried about the downside. $3.5 is HUGE support and $5 would be a 52 week high. My thought is its going to take a lot to get this stock to make any huge movement above $5, if it breaks $5 I would close the short call and let the $5 run or perhaps as you suggested, ratio to the long side.
sounds like a plan. The main thing is to understand what will happen if it goes up..down or nowhere..and you do.
I ended up at 6X calendar spreads yesterday.
I woke up at 6:30am today to sell my 35 APR/MAY calendar. I bought them yesterday for $0.50. I watched AMD keeps dropping and the calendar had quite wide spread. It went to b/a 50/70 cents at one time. I did not want to full around so I sold them at $0.60 when the stock was around $33. Overall I made $60 from 6 contracts for one night.
In the morning, the vol on APR was around 41% and MAY was 40%.
As of now, AMD is $32.25 with APR/MAY calendar at b/a $0.40/$0.55. Had I been up at my regular hour, I would have not make any profit at all.
How are other pepole doing on AMD calendar ?
-Nick