Calendar Spreads

Quote from daniel5198:

if u r short an Oct ITM call into ex-div, there is a good chance u find yourself assigned, thus having to pay that hefty div ($75 per contract). a painful experience, i might add, from a personal point of view/ (been there, ouch).
More...

First things first..The dividend has "no effect on an option" as it should be accounted for,ASSuming you are using the correct option model.Make sure you are using the correct model!!!!!!!!!

With that said,Dan is 100 percen correct in theory,but the odds of you being assigned on the Oct call by 9/7 is probably less than 2 percent..You can be pretty sure if the value of the Oct 65 put + stock carry/rebate from ex date to expiration > than the Div,you wil not be assigned....

Think about it..Why would someone exercise a long call to capture a dividend and what would deter him???
 
Quote from Eliot Hosewater:

I rolled for .90 credit today, bringing the overall debit down to .35. Hope to go green next month.
More...

That was a nice roll Eliot I looked to roll today and was looking at .85 for the mid:(
 
I am confused. It is RAI, and you are correct that there is not much liquidity. Thanks for the info and will look at it again.
 
Quote from cdowis:

I am confused. It is RAI, and you are correct that there is not much liquidity. Thanks for the info and will look at it again.
More...

i suggest you dont go anywhere near that stock....its not meant to be!!!
 
was looking into your suggested GS cal. felt better going the other way. sold rev cal Sep/Oct X 150 C for $2.6 credit. earnings coming out next week, i bet that stock will move enough to shrink time spread enough for profit. we'll c.
 
Quote from daniel5198:

was looking into your suggested GS cal. felt better going the other way. sold rev cal Sep/Oct X 150 C for $2.6 credit. earnings coming out next week, i bet that stock will move enough to shrink time spread enough for profit. we'll c.
More...


REVERSE calendar? Long Sep/Short OCT? Generally a reverse calendar is done to take advantage of high to low vol's...right now vol's are pretty low. If a straight Long call calendar you might do just fine. GL...beauty of calendarss you go long I go short and we both can make money:)
 
You must log in or register to reply here.
Back
Top