[TheOptionClub.com] New guy question

 

Hi all,

Just joined and glad to see the high-level discussions here. I'm at that stage of doing Options for awhile that I seem to be going backwards now and confusing myself. Been at it about 1.5 years.

Here's my question, and it's pretty basic:
I'm looking at calendar spreads on the SPY (just for example) and I can't find any that make sense. I'm on TOS. Looking at the risk graph, it looks like my debit is more than the peak of the graph, and that's asssuming I'm totally psychic and nail the price point exactly. (obviously not going to happen)

Am I reading this wrong? Take a look at any calendar, put or call, any strike and the debit is higher than the peak of the risk profile graph.
I realize you only want to use the right tool for the situation, but this makes it look like a calendar would never even recover . What am I missing?
Is it just that the IV is too low or too high on the SPY?

Thanks, (I'm studying calendars)
Jim

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