e-mini Calendar Spreads

Discussion in 'Options' started by i005890, Jul 14, 2009.

  1. i005890


    If I open a calendar spread on ES and the front and back month options have the same underlying future, is my loss limited to the amount I paid for the spread? For example, the front month is Aug. and the back month is Sept., which would both trade off the Sept. futures. Conversely, if the front and back month options are based on different futures, is it possible to lose more than I paid? For example, short Sept. option (Sept. future) against long Oct. option (Dec. future).
  2. mike007


    why not just use SPX and not /ES?
  3. MTE


    Yes, if the underlying is the same then your loss is limited to the debit paid.

    If the options are on different futures then you can lose more as you also have basis risk (the spread between Sep and Dec futures).
  4. i005890


    Thanks MTE.

    Mike007, as to your question, I see trading options on SPX as difficult for a small retail trader, but I could be wrong.

    Another question about ES. Since the end-of-month options are European exercise, while other options are American, would the differing option exercise styles cause any problems if the short option in a position is American exercise and the long is European?
  5. MTE


    The obvious difference is the pricing. Also, if you are assigned early on a short American option, you cannot exercise the European one to cover.
  6. i005890


    Thank you.
  7. The bid-ask spread of SPX calendar is wider than that of ES.

    From my limited experience, it seems that you get a "fairer" price using ES. Not sure if it is generally true.

    I am moving from spx to es.
  8. I like trading ES options better than SPX...size and electronic fills..however TOS hasn't been able to let you trade spreads with one click and legging into a spread has been troublesome. MTE does TOS let you single click ES spreads now? (haven't tried lately) thx
  9. I think so.

    [edit] Just tried, and it didn't work. :confused:
  10. I just tried it with TOS account with future trading permission. It worked!

    I think if your account doesn't have future trading permission such as IRA, it doesnt work.
    #10     Jul 15, 2009