Calendar Spreads

I bought back my WFMI 75/72.5 credit spread for a small profit a few days ago. Wasn't sure what the effect of the dividend was gonna be and didn't want to be in a position of waking up to find the stock where it is now.

Looks like my RUT IC will expire.

The individual stocks are like candy sometimes. I'm gonna try sticking to a healthier diet of veggies (indexes).



:D
 
right now it is pretty close. I have 10 contracts..and diff is only $200 so no big deal. this is in an IRA so I can't short stock nor sell a naked call (although I could do a bear call spread...hummmm thats a thought) and I certainly don't want to own it since my outlook is neg..thanks for the adv for watching the deltas..makes sense I'm still trying to learn how they impact your trades in real time..still a bit greek to me :p. They do report earnings before exp in Feb and after next week the Mar exp should open up so then I could roll the Feb down and over to Mar. There has to be some support for the stock so I want to give that a chance as well. thanks for the adv

Quote from gatorplease:

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).
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Your exactly right coach and I can roll to a put spread in May..thats one of my options. But since this is a calander exercise I'm hoping to keep it a calender :) or diag
Quote from optioncoach:

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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a ton of interest in the FEB 75/77.5 calls so that may be the way to go...sell the call spread for a cr of .95/1.0 then after Jan exp roll down to a diag for Mar (on the put side)....but thats not a great credit..hopefully vol next week will increase and I'll have a chance to snag it for a better credit.
 
Seriously, take the weekend off :)

Quote from DonnaV:

a ton of interest in the FEB 75/77.5 calls so that may be the way to go...sell the call spread for a cr of .95/1.0 then after Jan exp roll down to a diag for Mar (on the put side)....but thats not a great credit..hopefully vol next week will increase and I'll have a chance to snag it for a better credit.
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:D:p I'm done.....actually heading to Vegas tomorrow for a couple of days so won't be back to trading til wed...I don't gamble (hubby does tho) but there is actually some nice hiking trails..can't remember the name of the park.
Quote from momoneythansens:

Seriously, take the weekend off :)
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I posted this on another Calendar thread. Appreciate all input.

Hey Guys,
Tell me what the downside is here.

The Q's were ~$42 earlier today. The Feb/Mar 40 Call spread could have been bot for $.30
FYI - The OOM $44 spread could have been bot for $.30 also.

My thinking is that if the spread is in the money just prior to Feb exp the time value of the Mar call will be higher than the time value of the Feb call, and greater than the initial cost of the spread ($.30). Close the spread before exp for a profit.

What is the effect of early assignment?

If the spread is OOM at exp, let Feb expire and sell the Mar.

I would be interested in hearing how others manage these types of spreads.

Thanks for the input. Please be gentle.
 
I'm bumping this...hopefully someone smarter will come along:D (being exp week I think ppl are pretty busy) I have very seldom been called out early...its happened but usually there is sufficient time prem esp in the qqq's to keep that from happening. Also I don't think there is much dividend risk in the q's either...however if you did get called out it would be in the money right? Thus your Mar call will also have good value.
Quote from nlslax:

I posted this on another Calendar thread. Appreciate all input.

Hey Guys,
Tell me what the downside is here.

The Q's were ~$42 earlier today. The Feb/Mar 40 Call spread could have been bot for $.30
FYI - The OOM $44 spread could have been bot for $.30 also.

My thinking is that if the spread is in the money just prior to Feb exp the time value of the Mar call will be higher than the time value of the Feb call, and greater than the initial cost of the spread ($.30). Close the spread before exp for a profit.

What is the effect of early assignment?

If the spread is OOM at exp, let Feb expire and sell the Mar.

I would be interested in hearing how others manage these types of spreads.

Thanks for the input. Please be gentle.
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Thank you Donna,
I've placed the trades and see where it takes me.

Got 3 Feb/Mar 40 @ .30 & 3 Feb/Mar 44 @ .30.
Q's were ~42.40. Both spreads were Calls.

Cost about $100 each. I'll call it tuition.
 
thanks plz keep us updated...this weekend I'm going to update my wfmi feb/may cal
Quote from nlslax:

Thank you Donna,
I've placed the trades and see where it takes me.

Got 3 Feb/Mar 40 @ .30 & 3 Feb/Mar 44 @ .30.
Q's were ~42.40. Both spreads were Calls.

Cost about $100 each. I'll call it tuition.
More...
 
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