Aug 132014

Here’s a great tool that you can use to scan for good calendar trades. Calender trades are used if you think the stock price will consolidate and move sideways. Click on the “scan” tab in the TOS (think or swim) platform and use the following scan options.
-Market Cap (stock) – Look for highly traded stocks.
-Days Till Exp (options) – Enter an amount that will look for stocks that have “weekly” options.
-IV_Percentile (stock) – You want to list stocks that have a low IV% (implied volatility)

Here’s what it looks like.

After scanning I’ll look at technical analysis, industry & market conditions, earnings dates, and chart trends before entering the trade. One of the most important things is the IV%.  You want to get in with low IV so that the pricing will be cheap. As the stock moves  toward another earnings report the IV will increase and thus making the value of your positions go up. You make money from time value and the directional movement has no benefit. If it moves too much in 1 way then you can lose on this trade but with a choppy sideways market it’s great.
Calendars have been working nicely for me recently. Hope this helps find you some great trades!

Aug 072014

- BUY CALENDAR TWTR 100 SEP 14/AUG 14 45 CALL @1.53
I have been loving the calendars lately. TWTR coming off earnings here and looking to consolidate a bit. I think FB and TWTR are big players in the market these days. Seems everything else is a big drag when these stocks are very active and are in the same industry. TWTR hit support and I’m looking for it to stay around 45. I could have gotten a better price but I was chasing it, meaning using a limit order to get a better price but when the stock doesn’t trade back right away you will miss your opportunity. The longer you wait ends up hurting you because as the volatility rises the cost of options also rises. So,, most times with calendars you just want to buy them at market. I’ve been looking to stay on the OTM (Out Of The Money) side of the strike with the calendars so I can let the short option expire if needed.
The chart below is an example of what Options House gives you.

Aug 062014

- SELL CALENDAR FB 100 SEP 14/AUG 14 75 CALL @2.33
Here’s a really bad trade. Got a calendar trade on here looking for FB to sit around 74-75. I used the 75 strike because I wanted to use the monthly option and not a weekly and that’s the closed I could get with a call. I put the order in and forgot I had it on otherwise I probably would have pull out of it. We’ll see I guess.

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