Re: [TheOptionClub.com] Re: Double Calendar Adjustments

 

Jeff:

I am still waiting to understand one point in particular. 

Sometimes if you look at the risk chart of the entire double calendar it looks fine, but if you isolated it by individual calendars one may be "going into the bad neighborhood."

Do you then make your adjustment or wait until the overall trade seems headed for trouble?

Essentially to you make your adjustments by the individual calendars or the aggregate?

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From: JeffreyW <jeff@williamsen.net>
To: OptionClub@yahoogroups.com
Sent: Tue, April 27, 2010 9:26:35 AM
Subject: [TheOptionClub.com] Re: Double Calendar Adjustments

 

Leo,

When I adjust calendars it's based on two indicators: delta and momentum. When the delta moves away from one of the tent poles into the 'bad neighborhood' I look at the momentum of the stock. If I think it's just a flag, I will hold off making a correction.

If and when I do make a correction, it's usually another calendar at a lower/higher strike. Of course, if the trade is profitable and near 25% of max profit, I will probably just close it.

I have an extensive post on my blog related to calendars and double calendars - you may want to check it out.
http://theoptionguru.com/blog/2010/03/the-double-calendar/
There is also a video (see the downloads on the right) that goes along with the post.

I really love calendars and double calendars and I enjoyed the Dan Sheridan video that Chris provided.

Jeff W

--- In OptionClub@yahoogro ups.com, "leobusc" <leobusc@... > wrote:
>
> When deciding when to make an adjustment on a double calendar should I wait until the overall trade begins getting into trouble (as Dan Sheridan says "going into the bad neighborhood) ?
>
> Or should I look at these as individual calendars and make my adjustment when either of the calendars is moving "into the bad neighborhood" ?
>
> I am looking for the balance between over adjusting or waiting until it is too late to remedy a deteriorating situation.
>
> Leo
>

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