Calendar Spreads

THAT didn't go:mad: even tho at the end of the day the mark was below my bid...oh well. next time I'l post only if I get a fill. I guess calendar's are had to fill??

QUOTE]Quote from DonnaV:

It wasn't going...mid jumped to 2.10 so am trying 140 Jan/Feb for 2.35...will see if this goes [/QUOTE]
 
bringing this thread back up....was filled on WFMI 72.5 calendar (today)put spread Feb/May for debt of 2.45 (had to pay .05 to MM). I'm obviously happy didn't get filled last month due to the one time dividend pmt and the split...very interesting chat at tos las week on WFMI and why there is no free lunch even tho there is a bit of a skew in the calls.

The special div goes ex next week so I'm early but as long as WFMI stays above 72.5 by Feb exp I'm in the game. will post any adjustments as they occur.
 
how is this trade going for you now? with WMT reporting not so hot sales? any update? thx dj

Quote from nlslax:

Placed an order for WMT Jan/Mar 50 Calls @ .80 debit.

Been watching it all day with the b/a at .75/.85

Thinking it would have traded quickly at .80
Probably will if market tanks.
More...
 
Hello Donna,

Congrats on your great 2005.

Was holding Jan/Mar 50's. Was down ~40% and sold once WMT passed through 200 DMA. Maybe was too soon, but planned to sell once down 50%.

Do you think WFMI will hold at 75? What is the effect of the dividend?
 
thx tho my overall return was only abt 9.2% not quite enough to cover what we spent :D hopefully '06 will be GREAT! with all the new knowledge.

I think my play is probably early on WFMI as there may be some uptick with the div going ex on the 13th. For me its a fundamental story of a stock too high too soon and by Apr/May should come down somewhat...at least thats my hope. If I'm wrong then will bail in Feb.

In the chat they speak to the special dividend and it will briefly come down but could go back up. Last year got caught in the cross-fire of the MSFT special div and bought back calls (shouldn't have) and generally messed up so may be Kharma is on my side on this one :p

Quote from nlslax:

Hello Donna,

Congrats on your great 2005.

Was holding Jan/Mar 50's. Was down ~40% and sold once WMT passed through 200 DMA. Maybe was too soon, but planned to sell once down 50%.

Do you think WFMI will hold at 75? What is the effect of the dividend?
More...
 
well WFMI took a rather big hit today 3.00 was a little suprised by the size of the hit. the 72.5 Feb is now in danger and I'm trying to come up with a plan. I would have to roll all the way to may if I chose that course...the other option is to roll down to 70...there is time but would love to hear from others with more experience in calendar spreads. There was an article out today in the WSJ so may be thats why the excessive hit. I am neg long term but didn't think the the market was:)...comments anyone?
Quote from DonnaV:

bringing this thread back up....was filled on WFMI 72.5 calendar (today)put spread Feb/May for debt of 2.45 (had to pay .05 to MM). I'm obviously happy didn't get filled last month due to the one time dividend pmt and the split...very interesting chat at tos las week on WFMI and why there is no free lunch even tho there is a bit of a skew in the calls.

The special div goes ex next week so I'm early but as long as WFMI stays above 72.5 by Feb exp I'm in the game. will post any adjustments as they occur.
More...
 
Quote from DonnaV:

well WFMI took a rather big hit today 3.00 was a little suprised by the size of the hit. the 72.5 Feb is now in danger and I'm trying to come up with a plan. I would have to roll all the way to may if I chose that course...the other option is to roll down to 70...there is time but would love to hear from others with more experience in calendar spreads. There was an article out today in the WSJ so may be thats why the excessive hit. I am neg long term but didn't think the the market was:)...comments anyone?
More...

Your deltas are very similar so the long put should be gaining at the same rate as the short put, at this stage. How many contracts did you trade? You can always short the stock if it passes through the strike price.

Also, consider boxing the position by selling a call. You can get some premium that way too.

The chart it UGLY! But certainly due for a bounce.

I think market is at an important point right now. My indicators are ready to roll over. But this is also the point wher e they can bounce. I started nibbling on some spy puts. I'd sit and watch your deltas. You're ok until the short delta starts getting away from the long delta. Then consider shorting stock to cover (if financially able).
 
YOu can also roll your long-term put into a bear put spread by buying back the short-term put and selling a lower strike put in the month of the long leg of the calendar spread. The roll should cost you very little given the time premium in the longer term sale (although I am saying this without checking quotes).

This way if the stock keeps moving lower you profit from the now bear spread.

Or have I mssed up completely on what your position is?
 
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