My calendar spread experience did not work quite as well for me as I had seen it work for others (referencing youtube videos by Dan Sheridan and seeking alpha). It seems the market tends to self correct, also I notice that the usual advice like "you want to put on a calendar spread at the money", is not really the best advice in most cases. In this game adjustments are everything hint, hint.
It only makes profit if there is big drop (50-60%) and enough recovery within 3-5 months. Else this is making loses all the time.. Either if stock is flat or if it is moving up slowly you are losing always. Adjustments means rolling puts and calls, soon we are in leaps with calls and credit received on call's make no sense, rather it caps upwards profit potential and value of loosing puts really hurts Most of the times, Suddenly on one day, he asks to exit position and till then puts (which we have rolled multiple times) had cost us a lot and calls have to be bought to exit. Overall l never saw significant profit after following this for 2+ years. In the youtube videos of SNAP, UAA, JP and other collars, he never shows the profit we were not able to make due to shorted calls, even if stock spiked up significantly, and costs of puts he lost. So now the profit is not on 100% of position but just around 20% of total uncapped holdings, which don't have short calls but we are spending on buying puts for 100% of position. I took 2+ years to understand that Profit of 400-1100%, which is shown on youtube video, even in this best scenarios, is absolute impossible. Also the cost of puts is significant. Around 3-5% is the cost of put and you are expected to buy minimum 8 times in an year. After all my calculations, In an year, Average Total Cost of puts is 32%. He can't recover 32% from shorting calls and rolling within the same year. This can't be zero cost any anyhow. Now a smart guy will think that max cost to be in his collar is 32% and in some cases stocks moves 100-200% in an year and so 32% cost with protection of put is fine. More details for them, If stock moves 200% in an year, you are not making 168% (200-32), but you are hardly going to be in any profit as the short call have already capped your profit. Though he try to make it picture perfect, but it is no sense. You can never beat index with this but will have a feeling that you are playing smart. Better Buy Vanguard (75%) and US Treasury Bonds(25%) and you can beat his Collar's returns SIGNIFICANTLY. This is Conclusion from My 2 years experience with SOS. Spread trading zero risk is BS. It is in fact very stressful