Mo, I stuffed up my reply to you. The bold quoted highlights also includes my replies to your comments. Except they're bolded as well Im sure you'll pick it up if you read it.
Let me think about this. The implication is that when you open a calendar, it would be better, all things equal, to open it slightly above the market. If market goes up, you benefit fr gamma, if down, from volty. Does that make sense?
>Thanks for the risk profile and you're probably correct. Its probably due to the fact that the distance between my short strikes is 125 pts. My take on it. The double diag, unlike the IC, does not like FOTM since you want the market to approach one short or the other. And =not= in the middle, between the strikes.
When you pay a DEBIT for the double diagonal, it's important that you have a good chance to sell out your longs for enough cash to compenstae for that debit. Suggestions: a) If trading FOTM, find strikes that allow you to obtain a cash credit when opening the position. or b) Move your short strikes closer. Yes, that increases the possibility of being forced to adjust, but it also gives you a better chance to earn a profit from the trade. Mark
Sailing, Can you share your diagonal trades for sept. I want to follow them to see how they work. I want to paper trade this month.
Since people have been asking, I've updated the SET vs SPX Thursday close spreadsheet. This spreadsheet compares more than eight years of the monthly SPX Thursday closing price with the Friday morning SET.