Calendars on Q's

[xtrhvydty]

Not buying the calendar every two weeks, just when a quiet period predicted. Using the higher theta of the near-term EW/ES.
Optioncoach has been doing similar w/other spreads:


08-24-06 01:13 PM

DIAGONAL POSITION UPDATE


Sold 135 AUG EW 1315 Calls @ Average Price of 1.83
Credit = ~ $12,402.50

Bought 150 SEP ES 1335 Calls @ 1.45
Debit = $10,875

INITIAL NET CREDIT = $1,527.50

 

[mysticman]

Quote from xtrhvydty:Not buying the calendar every two weeks, just when a quiet period predicted.

I didn't ask whether you were buying the calendar. I asked whether you were selling the ES/EW options.

If you buy a calendar using October exp for long you can sell ES/EW 4 times.

 

[leonnis]

Quite right Hybone. Tried to find "cheap" cals for quite a while then i realized was making better net on greater debit cals.
If you have a 0.50 debit it is unlikly you can get a roll that exceeds your commisions by much at all. And you do have to estimate your roll(s) before you decide to get in.

Quote from Hybone:

In general I am not a fan of calendars on low priced and vol underlyings, as commission expense on calendars coupling with low premiums for the Q's would really eat into your ROI..... but that's just me!