OPTIONS ADVANCED MODULE

Calendar Spreads Live Trade

Calendars Spreads are popular trades and come under the category of Time spreads. In a Calendar spread, we sell the front month Option series and buy the back month Option. The Calendar is generally constructed at the money, however, you can create bullish or bearish variations. It starts out as a delta neutral but can quickly move into a biased position. The Calendar is also one of the few strategies that is a Theta positive and a Vega positive trade. Because it is Vega positive, your Calendar will do better if Volatility increases after you put the trade on. The primary method of profit in Calendar Spread Strategy is to take advantage of a higher level of time decay in the front month. We put a Calendar trade on the GLD, and this quickly turns into a Double Calendar when price moves too much in one direction. In fact, this trade is an absolute roller-coaster and you will learn a very valuable lesson – Don’t give up on your losers. If you simply close your losers and move on to the next trade, you will make the same mistakes and lose again.