short box calendar spread dividend capture?

Discussion in 'Options' started by Terikan, Apr 30, 2013.

  1. Terikan

    Terikan

    I'm too noobish and sitting here without any tools to get a handle on this. I was into the idea of looking for good short box premium arbitrage, but in the event IB commissions and fees are too high to make anything out of it, was wondering about a box that extends over two expiration periods.

    The first would be itm puts sold, otm puts bought (or not who knows), puts would be deep enough to normally garauntee assignment. Collect dividend, next expiry is short calls deep itm and long calls otm. The box would be designed to limit profit and loss due to stock price movement.

    Obviously since this is not at the same expiration, there's going to be some discrepancies.

    But generally how viable would something like this be to capture the full value of the dividend without losses that premiums couldn't cover?