Nifty calender spread with calls or puts

[gmt900]

Hi GMT,

What did you do on this trade finally? What is the P/L?

Do you think Calendar Spread is a good option strategy for Monthly income?

Thanks..!!
Hardik Shah

I squared off the calendar spread on 23.9.14 for no P/L.

I decided to explore calendar spread strategies for the reasons I mentioned in my first post.

I am happy that I got a feel of the strategy.

To answer your second question, this strategy or any other strategy cannot be considered as " Good for monthly income".

I have studied short strangle and it's adjustments including delta neutral for nearly two years and now I can play this strategy fairly confidently but cannot say it is good for generating monthly income.

I have decided to concentrate on nifty option strategies because it suits my temperament. So it is necessary for me to study all the option strategies.

After adequate experience, I feel I will be able to enter a strategy and modify it as market conditions change.

For now, my goal is never to lose in any month and target a minimum profit of say 2 % of the trading capital.

wish you good trading

gmt900

 

[cheap]

I am trying to learn calender spreads.

There are two advantages of using them.

Margin requirement is much lower and max potential loss is known upfront.

The strategy will be successful when minimum movement is expected.

May be, it will not be useful during current volatile movement of nifty. However, I would like to prepare for it whenever volatility of nifty reduces.

I am trying to analyze the strategy on OptionsOracle.

If one enters strategy with calls with one lot,
Sell 7650CE JUL @ 82.70
Buy 7650CE AUG @ 129.90

On 31 July,
Max profit 3933

Max loss 2360

loss @ NS 7200, 1870
loss @ NS 8000, 1230

One could enter with similar trade with Puts.

Option Experts and Practitioners may please comment on the following;

1.How does it compare with iron condor?

2.Considering lower margin requirement , will the percentage returns be better
than Iron Condor.

3.What are the possible modifications to reduce possible loss.

4.Any other point I may have missed.

Thanks and reagards,
gmt

Hi ,
Do you use excel calculation for calendar spread ??

 

[cheap]

Hi ,
Do you use excel calculation for calendar spread ??

I've a friend on traderji, he do calendar spread, he uses time interval kind of strategy in excel and he do it with z score.

 

[gmt900]

Hi ,
Do you use excel calculation for calendar spread ??

I use OptionsOracle for analysing all my option trades.

 

[gmt900]

I've a friend on traderji, he do calendar spread, he uses time interval kind of strategy in excel and he do it with z score.

Did not understand the meaning of this.

 

[hardik229]

Hi GMT,

A quick question. Why can't we do Calendar Put Spread. What I observed that difference in the Put's amount for the current month to the next month is very low. So risk should be low as well to trade on this strategy.

Thanks..!!
Hardik Shah

 

[cheap]

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Did not understand the meaning of this.

Hi,
He said it's a term for statistics finance calculation, his mentor has been prop trader in tokyo and they use it in HFT.he's not talking more about it, I'll ask him again.

 

[gmt900]

Hi GMT,

A quick question. Why can't we do Calendar Put Spread. What I observed that difference in the Put's amount for the current month to the next month is very low. So risk should be low as well to trade on this strategy.

Thanks..!!
Hardik Shah

Yes Hardik. I think we can go for put calendar spread if the difference is low.

For now, I will not enter into any trade but may do some paper trade if I feel the set up is right. That's the way I plan to learn. It may take a few months before I get the feel of calendar spreads.

Good trading
gmt