Is there a technical term for either of these two trades??

Discussion in 'Options' started by Cabin111, Mar 26, 2021.

  1. tayte

    tayte

    #11     Mar 26, 2021
  2. Cabin111

    Cabin111

    I think I found something...

    Calendar Spread
    By
    James Chen
    Reviewed by
    Gordon Scott
    Updated Feb 13, 2021
    What Is a Calendar Spread?

    A calendar spread is an options or futures strategy established by simultaneously entering a long and short position on the same underlying asset but with different delivery dates.


    In a typical calendar spread, one would buy a longer-term contract and go short a nearer-term option with the same strike price. If two different strike prices are used for each month, it is known as a diagonal spread.


    Calendar spreads are sometimes referred to as inter-delivery, intra-market, time spread, or horizontal spreads.


    Key Takeaways
    • A calendar spread is a derivatives strategy that involves buying a longer-dated contract to sell a shorter-dated contract.
    • Calendar spreads allow traders to construct a trade that minimizes the effects of time.
    • A calendar spread is most profitable when the underlying asset does not make any significant moves in either direction until after the near-month option expires.
     
    #12     Mar 26, 2021
  3. Cabin111

    Cabin111

    I have done Exxon (XOM) covered calls at different dates/same price. I have also done silver (SLV) for different prices to expire on the same date...

    Not that strange...
     
    #13     Mar 26, 2021
  4. I know, but so far in the future, seems like a lot could happen, why would you be stuck with the stock for that long?
     
    #14     Mar 27, 2021
  5. My reason for asking was because I want the answer furthermore!
     
    #15     Mar 27, 2021
  6. I wanted to know the answer.
     
    #16     Mar 27, 2021
  7. BKR88

    BKR88

    Cabin111 is a long-term investor, not a trader. I also have calls sold on ETFs for Jan 2022.
     
    #17     Mar 27, 2021
    Cabin111 likes this.