Thank you, Robert! I guess I am still thinking directionally, so the idea in my head was to let the front months expire worthless and be left with long straddle (best case scenario). I don't think I've ever come across anyone describing this as a valid strategy (where both guts and wings are same strike). Must be either incredibly genius or incredibly dump.
trading volatility
- Thread starter met1989
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Robert Morse
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Well the 4 legs are good for your broker but not you. And, not appropriate for a stock you expect to move a lot.
This is essentially a double calendar, although normally a double cal would be done with Puts and Calls at different strikes, and both OTM. Eg, if SPX is at 2930, then the Put cal would be at a strike say 2900, and the Call cal would be at something like 2960. This gives a nice wide-ish profit 'tent' with a dip in the middle.
No, it's not.
A call and put calendar at the same strike are equivalent. You're simply doubling size. WTF do you people feel the need to drone endlessly about sh!t which you're clueless?
This says a lot about your level of maturity. If you have a better name for the structure then lets hear it. Otherwise, you're just behaving like a cocky school-boy. I don't care how many fanboys you have here or how many thousands of cryptic posts you have under your belt - if you cannot be civil and post something useful to the thread, then stay away from it.
It's equivalent. A put calendar is arbitrage-eq to the call calendar. IOW they are identical in risk.
SO NO. It is NOT "essentially" a double calendar. Trading a one lot of each is simply doubling the exposure to the calendar at that strike.
It's not semantics. It's arbitrage.
Stay away? Take your own advice until you have something of value to contribute.
This thread-starter is a legend.
Props to you, sir.
Cheers.
Props to you, sir.
Cheers.
I put you on block.
You don't know that a put and call calendar at a strike is equivalent. So out of ignorance you tell the guy it's "essentially a double calendar" which is erroneous.
It's synthetics 101. Trading a put and call calendar at a strike is doubling your size/risk. Not knowing that is dangerous.
Say you're long a DITM put calendar and the market is wide and you're babysitting an order to STC with no liquidity. The same strike call calendar can be shorted which results in a synthetic long shares in the front; synthetic short shares in the deferred. You're shorting the call calendar bc ostensibly there is more liquidity in the OTM.
No risk as you're simultaneously long and short in tenors.
You don't know that a put and call calendar at a strike is equivalent. So out of ignorance you tell the guy it's "essentially a double calendar" which is erroneous.
It's synthetics 101. Trading a put and call calendar at a strike is doubling your size/risk. Not knowing that is dangerous.
Say you're long a DITM put calendar and the market is wide and you're babysitting an order to STC with no liquidity. The same strike call calendar can be shorted which results in a synthetic long shares in the front; synthetic short shares in the deferred. You're shorting the call calendar bc ostensibly there is more liquidity in the OTM.
No risk as you're simultaneously long and short in tenors.
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