I was able to get a fill on rolling up to a diagonal the 115 as well as the 120 puts for fills of 1.0 and .70 currently holding Apr125/June 115 for 5 contracts and 125Apr(puts)/120 June puts @ 10 contracts. net debt has been reduced to .50 cents on the June 115's and to 2.25 on the June 120's. Risk however has increased...need SHLD to stay above 125 by April.
The advantage of calendar spreads is NO margin requirements...whereas on IC's you will have a lot of $$ tied up in the spread. Of course when you diagonalize the calendar you then have $$$tied ups as well. What I'm trying to do is figure out for the amount of dollars tied up in an IC how many calendars can you buy In an IRA which is where I do 99% of my trading there is no margin so I've built up a cash stash to back my IC's but really am looking for solid strategies that don't require margin.
its nokia(nok) on twenty contracts: delta=43, gamma= -22, theta=19,vega=38. it goes x-div on the 31st of march so need to watch the extrinsic.
so you are doing a call calendar? sorry for the questions but my trading platform doesn't give the option symbol's...so I'm guessing here you did an Apr/Jul nok 20 call cal? for a debt of .55? the volatility looks good... fairly low...the only worry I would have on a call cal is that the nok is at its high for the year...but the beauty of calendars is you can be wrong in direction and still come out ok. If the dividend is large it can affect your short April call but looks like you have your bases covered. I'd appreciate know how it turns out for you. Good luck!
Thanks to everyone for the great dialogue on CS. I'm somewhat new to CS and wanted some feedback on two CS that I have open right now. 1) AOC-Aon Apr/Jul 40 call spread that I opened for 1.35 debit. 2)Qcom- Apr/Jul 47.5 call spread that was opened for 1.70. I'm thinking I might need to adjust this if it continues to rally. Thanks for any feedback. Glenn Also, where might there be some books or reading material to study further on CS adjustments?
Hi Glenn...welcome if you find any good material plz share There isn't too much out there on specific adjustments. Budwick/Jabour's "Option Trading Strategies and Adjustments" (I may have mangled the title) does offer some on the CS, not sure if Charles Cottle's new book specifically does. I've been collecting articles and postings for the past year on all types of strategies including CS. Of course experience is the BEST teacher thats why I've been journaling the three I opened in Jan/Feb. If you haven't I would go to TOS's option planet and sign up for the beyond the basics's class then download their manual..it covers calendar's. You can then just xl the class if you don't want to go (its free). It offer's some guidelines for opening/rolling and closing the CS. As far as your's they look good to me. As long as there is time premium left in the short you shouldn't have to roll too soon. TOS recomends abt 10 days prior to op ex of the short. The other option which I did on WFMI was actually roll the long call forward one month to lock in some premium. So if Qcom continues to go up then April exp you could roll the short to May and the long strike to June and collect on both ends...then close the trade in May. Good luck and plz feel free to share how you do manage the trade
Thanks for the feedback Donna- I did go into TOS and found some good chat transcripts with Tom Preston and some other info that's pretty informative. I think your plan of a writing dialogue is the best way to learn. The good thing about CSpreads is that even if the underlying goes against you, you don't lose out too much.....at least not yet.