No. of Recommendations: 2
Pete I asked the question because I have not done calendar spreads.
The point of my question was to understand why or why not it would not have been a good play.

I had very good reasons for assuming a tight range on the QQQ's (but that does not mean they will be correct).

The market seems sideways to me, and just like DEC the market seemed to be moving in both directions without any follow thru in either direction.

We will see if this runup is over and we sell off for a bit now, or not. Oddly enough I am more comfortable with the play where the QQQ sits now than when I suggested it. No I still do not intend to do it, I was more interested in the thought processes around it.

Last month QQQ and INTC and many many other stocks I followed closed right at max pain. I believe they will do so again, which will put the QQQ in the range I expected. At Today's close of the QQQ at 41.67 I am more comfortable that the QQQ would fall in the profitable range than I was when the QQQ was roughly at 40 where I inquired about the trade. Finally, even if I was wrong on the short side, I was reasonabley comfortable buying QQQ's on the dip.

Delta hedging could send the QQQs much higher but I sort of doubt it.
Likewise I will be surprised if INTC closes above 35 at expiry. I have watched INTC for quite some time and it usually closes within pennies of an option strike. Last month it rose to 34 or so then started showing weakness and I did apost that it would close right at 32 1/2

Some stocks seem more prone to close at max pain than other. MSFT for example almost always closes above max pain while INTC (in a trendless market) closes right on nearly every time.

Of course in a strongly trending market, sinking or rising either one, and on low optioned stocks at any time, max pain is totally useless.

The trade I inquired about was based on a belief (right or wrong) that there is no strong trend (the strong uptrend ended and no strong downtrend developed) and I was trying to figure out if that was a good way to take advantage or not. Since January bias is normally up, perhaps a straight bull spread would have been a better idea, but perhaps not, but at any rate I wanted to learn more about calendar spreads.

Thanks to all who replied to the inquiry.
Any additional information on how you decide to use a calendar spread vs other spreads would be appreciated.

Thanks
M

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