Okay, this Calendar Options thing sounds great, right? Yeah, we think it does. Later in this post we’ll tell you how Calendar Options is going to work—but before you go out and open up half a dozen 10-contract positions, there are a few things you need to know, at the very minimum, about trading calendar spreads. Even though they resemble iron condors in some ways, those longer-expiration options lead to some very important differences: Calendar spreads are almost always net-debit trades, which means that we won’t have as much cash sitting in our account earning interest. . .but at current rates, that’s kind of a joke anyway. Because calendar spreads have less distance between the break-even points, adjustment is an important part of the strategy. In our view, this is a plus, because we can change the profit curve of a ...

If you know what an iron condor is—which, if you’re reading this, you probably do—you also know that it isn’t the only options strategy out there. It’s worked very well for us, consistently providing close to 10% average monthly returns—but a lot of our subscribers have expressed an interest in, shall we say, a bit more variety. Sure, our bonus trades mix it up a little, but we thought it was time we started talking about other kinds of trades on a regular basis. That’s why we’re introducing Calendar Options. Condor’s Complement So what’s the best way to complement our iron condor positions? We like the idea of profiting no matter which direction the market takes from week to week, especially with so much economic uncertainty out there right now. So we’re going to stick with the delta-neutral theme for our ...

As you probably know Iron Condors are short Vega - which represents your positions sensitivity to shifts in implied volatility. In a relatively low volatility environment this can be troublesome when suddenly volatility spikes and your Iron Condors suffer as a result. So lets say you add some Vega to your portfolio by buying some 4 month calendars (ex: June/October) to hedge against an expected volatility pop. You now have a net Vega position of 100, your Delta is flat and you have some good Theta. The next day the VIX spikes up 2 points on some heavy selling. In theory you should get close to 200 bucks from the pop since you have 100 Vega and volatility went up 2 points. To your suprise your portfolio suffers just as if you had never even added the calendars - in fact it seems they made it worse. So what gives? ...