Take look at the premiums on things like AMZN, GS, BLK and IBM, for example. The absolute amounts are substantial, though I have not done the money-at-risk or ROI calculations. An enlightening exercise can be to compare the return on the spread with the premium on a comparably priced (to the spread) stock. Spreads of any sort look attractive sometimes.
-----Original Message-----
From: OptionClub@yahoogroups.com [mailto:OptionClub@yahoogroups.com] On Behalf Of billb_
Sent: Monday, November 23, 2009 9:37 AM
To: OptionClub@yahoogroups.com
Subject: [TheOptionClub.com] Re: Basic Calendar Question
I don't understand what price has to do with any strategy to be quite honest. If price of the underlying gave you an edge, wouldn't that be arbed away?
--- In OptionClub@yahoogroups.com, "drrobhansen" <robhansen5252@...> wrote:
>
> I had heard either during a webinar or maybe in a magazine that calendar spreads are best put on with high priced stocks. Is there anyone that would explain to me why it would be advantageous? Or maybe I'm just mixing this up with some other strategy?
>
> Thanks,
> RFH
>
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