Advisable to do a calendar spread with AAPL?

Discussion in 'Options' started by yalag, May 31, 2012.

  1. Basically a calendar is long volatility (because of the long option is back-month, and the short option is fron-month); and if AAPL goes up, volatility will likely go down.
     
    #11     Jun 6, 2012
  2. In stocks calendars work best when you are predicting a move DOWN (because a move down tends to increase vol).

    I stocks butterflies work best when you are predicting a move UP (because a move up tends to decrease vol).

    It can be different in commodities, though, and that is reflected in the skew.
     
    #12     Jun 6, 2012
  3. I tend to agree with the last comments... A calendar is not a bullish play... Its good when volatility is low and price high. What the OP was looking at is def a buy-write with options. I also like flies as some have mentioned, specifically with puts, if established for a net credit. I like them because they give you a lot of chances to adjust on the downside because of the spike that is actually lower than your starting point.
     
    #13     Jun 6, 2012