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Trading Options: Calendar Spread (Setting Up the Calendar)

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Trading Options: Calendar Spread (Setting Up the Calendar) ★ SUMMARY ★ Hey its Sasha Evdakov founder of Rise2learn and in this video I want share with you how to trade options no one to talk about what exactly is a calendar spread. This is just an overview so it's not going to get in detail about calendar spreads but i just want to give you an overview insight of what a calendar spread is. First of what you're doing with the calendar spread is you’re buying premium in one month as protection in your selling premium in the current month so that's why it's called the calendar spread so your nearest month what you're doing is you’re selling the most amount that you can and in the further away month you're buying protection. Posted at: http://tradersfly.com/2014/03/options-strategy-calendar-spread-setting-calendar/ ★ SHARE THIS VIDEO ★ https://youtu.be/-UiQmx2oKh4 ★ SUBSCRIBE TO MY YOUTUBE: ★ http://bit.ly/addtradersfly ★ ABOUT TRADERSFLY ★ TradersFly is a place where I enjoy sharing my knowledge and experience about the stock market, trading, and investing. Stock trading can be a brutal industry especially if you are new. Watch my free educational training videos to avoid making large mistakes and to just continue to get better. Stock trading and investing is a long journey - it doesn't happen overnight. If you are interested to share some insight or contribute to the community we'd love to have you subscribe and join us! FREE 15 DAY TRIAL TO THE CRITICAL CHARTS -- http://bit.ly/charts15 GET THE NEWSLETTER -- http://bit.ly/stocknewsletter STOCK TRADING COURSES: -- http://tradersfly.com/courses/ STOCK TRADING BOOKS: -- http://tradersfly.com/books/ WEBSITES: -- http://rise2learn.com -- http://criticalcharts.com -- http://investinghelpdesk.com -- http://tradersfly.com -- http://backstageincome.com -- http://sashaevdakov.com SOCIAL MEDIA: -- http://twitter.com/criticalcharts/ -- http://facebook.com/criticalcharts/ MY YOUTUBE CHANNELS: -- TradersFly: http://bit.ly/tradersfly -- BackstageIncome: http://bit.ly/backstageincome
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Text Comments (52)
Alex Shirin (8 days ago)
Александр, здрасти. Могу задать Вам проблема на российском языке?
ksafan (2 months ago)
Well done and thank you for taking the time.
Sasha Evdakov (1 month ago)
You're more than welcome. Thank you for taking the time to watch.
Vlad (7 months ago)
thank you for explaining .but, it's kind of confusing when you hit the "sell" on ask (5.09), instead of hitting on the bid price !! (it makes people swear, for 2-3min.)
Sasha Evdakov (6 months ago)
Typically i right click and do what I need rather than clicking the buy or sell... when you right click and make a choice it doesn't matter what you click since you select it from the menu
Kudo AMV (7 months ago)
Sir can you please suggest a virtual option trading platform for me to practice this concept ?
Kudo AMV (7 months ago)
Sir I took the notes , when I watched the video , So I'll checkout thinkorswim
Sasha Evdakov (7 months ago)
Thinkorswim or pen and paper
cherukuri sai tharun (7 months ago)
Friend. Know onwards I will promote your youtube channel. You deserve more subscribers
Sasha Evdakov (7 months ago)
+cherukuri sai tharun thank you so much for the kind comment and for spreading my message and videos. I'm glad you are enjoying the videos. Hope you have a nice weekend ahead.
Benjulie Benjulie (8 months ago)
when i tried a similar trade I was alerted by my trading platform that the offset in the expiration dates could leave me with an uncovered position..How could this occur?
Kevin Kitts (6 months ago)
Short leg option ends in the money but long leg option (protection) ends out of the money.
Sasha Evdakov (8 months ago)
+Benjulie Benjulie this of course depends on if you're putting on a position individual options at a time. If you're getting into a single contract alone than this will create a naked strategy and that's why you have an uncovered position with an undefined unlimited risk potential. So normally you want to enter spreads all at once to help offset that unlimited risk. Also you want to make sure that you're covering by the end of the month on calendar contracts because that way you don't have a single individual option contract at which point you have a Theta Decay process that starts to occur.
slinkkk crown (1 year ago)
"STAACK" it's stock
Sasha Evdakov (1 year ago)
+Vaibhav Toora thank you so much for the comment I truly appreciate it and thank you course for watching the video.
Klapmoel (1 year ago)
Good video. I have learned a lot from your Options teaching.
Sasha Evdakov (1 year ago)
+Klapmoel great to hear! Thank you so much for watching the videos and please feel free to reach out if you have any questions about the material.
aL (1 year ago)
So how do lean more delta vs vega? Please explain the actual process how do do this etc
Fadi A (1 year ago)
iron condors are easier, more better and then you can buy a put or call each 10 iron condors to offset losses.
Paulo Justiniano (1 year ago)
we are in such a low iv environments and selling credit spreads it just does not work. I have 5 credit spreads 40 days out with a delta of .25 and 9 out of them are loosing bad while the other one is not as bad but still loosing as days passes. I did went out of the money 1.5 standard deviation, with mid 30s to 40s iv rank but still I am getting crushed bad. Luckily every position I have is very small. what would you recommend in this low iv environment calendar spreads?
Sasha Evdakov (1 year ago)
You can still trade credit spreads in low IV environments, but of course your earnings will be less... depends on what your risk to reward and the personal risk levels you want to take on... One can of course have various strategies depending on different market environments.
David Hayter (1 year ago)
this is rad dude.
Sasha Evdakov (1 year ago)
Thank you for watching :)
foki Farooq (1 year ago)
Sasha what software do you to plot your risk profile?
Sasha Evdakov (1 year ago)
Thinkorswim for the options.
E. (2 years ago)
Open question.. calendars are vega positive, but volatility moves differently for different months. On a recent NDX calendar, the NDX dropped and the vol on the back month went from 16 to 17 while the front month went from 14 to 17. So.... does the TOS position vega overstate the true vega due to this? thanks in advance, all.
foki Farooq (1 year ago)
There is no assumed parallel dropped in Implied volatility. also don't forget front month is more volatile then back month.  start out with verticals and you can turn em into other positions. Gl
foki Farooq (1 year ago)
No its a sucker play, back month Vega will be bigger then front month. don't employ this strategy during earning, you will lose.
E. (1 year ago)
+Sasha Evdakov Thanks for the replay, yes.. But the front month IV moves more than the back month IV. So, on a vol crush, say after earnings, your front month IV might drop 8% while your back month vols might only drop 3%. Does this offset some of the long vega of a calendar?
Sasha Evdakov (1 year ago)
I am not sure what you mean regarding true vega - the vega will be calculated based on your option differences between the front and back month.
foki Farooq (2 years ago)
awesome video, sasha is there a way to find out before hand how much can  you make on  your calendar spread? also is there a way to find out which calendar spread is better call calendar or put calendar?
Sasha Evdakov (1 year ago)
Calendars final price will change as you have to get out of them. So in the end depends on when you get out... but they also adjust as your second month will change in value.... so there is no defined final price like an iron condor. Which one is better? will depend on your strategy - they are all just strategies.... hybrids vs truck ---> depends what you do... save gas vs moving a lot of furniture.
marketguy danu (2 years ago)
It is a horisontal calendar, but weekly OTM diagonal calendar spread is a monster-theta eater! Спасибо Санек, у тебя классные видео!! Надеюсь уеду в Австралию, стану богатым, будет больше общего меж нами )
Sasha Evdakov (2 years ago)
Welcome :)
Gatsby Light (2 years ago)
In this video, any reason for selecting "single" option twice (once for each leg of this calendar spread trade), instead of just selecting "calendar" from the TOS sub-menu?
Gatsby Light (2 years ago)
Cool. Good work Mr. Evdakov.
Sasha Evdakov (2 years ago)
+Gatsby Light Simply to show the construction. Not every platform can do a single calendar selection. Of course you can take that approach and just hit buy the calendar.
Jessica Francis (2 years ago)
Thanks for the video. Was wondering when you said if you have multiple contracts to close them out over time to catch profit, how do you do that? Do you just use to arrow key near the number and it automatically closes that contract for profit or is there another process?
Sasha Evdakov (2 years ago)
+Jessica Francis There is no specific or automatic way - every trading platform is different... All I am saying is if you have 5 apples and 3 are going bad - it is best to sell the 3 apples going bad FIRST to get some money and then the others you can sell later... as you have more time to find buyers.
A.R. Hu (2 years ago)
Good video. If volatility increase positively impacts on a long calendar and volatility increases usually when a stock goes down, I would probably do the opposite as the video suggests. That is to position the calendar a little bit positively so the loss in delta can be compensated by increase in vega, and vice versa.
warever37 (2 years ago)
Great video Sasha, but I have a question: suppose your front/back months are 30/60 days, and after 20 days from initiating the trade (a Call Calendar), the stock trades above your strike price, but below your upper breakeven point. Now you have an unrealized profit from time decay, but what happens if you get assigned on your short Call since it's ITM now? How do you profit from this situation?...... Thx
Sasha Evdakov (2 years ago)
+warever37 Your protection from the further out (60 days would kick in) Typically you wont be assigned if you get out and the VALUE of your option is above .05 or .10 cents... this is because remember the other side has purchased it and can exercise that contract at any time... Why wouldn't they hold on to it a few more days in case that stock powers higher by accident or by earnings... To avoid the assignment typically I get out early in the expiration week or earlier... I have been assigned before on a few spreads, but then the other side automatically kicks in (or you call it in) and it will be adjusted with your broker. This is why you get the other side of the trade for that protection.
Hammad Hassan (3 years ago)
Great videos Sasha. Your way of teaching is the most simplest and to the point. All the best!
Sasha Evdakov (3 years ago)
+Hammad Hassan Thank you Hammad! Appreciate the positive comment :)
waqar usman (3 years ago)
nice video. sasha why not make this education  free. About indepth video's I am in the middle of building a website that will change the game.. entering criteria, adjustments to all spreads, butterflies, broken wing butterflies how to lock in profits all for free..... when to buy call or put calendar spreads, first check the value of jelly roll. just give me a month  people. you will get 1000's of dollars worth of education at a cost of ZERO. and I will double the offer with my everyday trading absolutely free of charge. why?. cause I am making tons of money actually trading, not teaching. keep up the good work sasha. cheers
Mike Cleveland (1 year ago)
I see this was posted 2 years ago, can you give the website you mention above?
laz l wl (1 year ago)
Sasha Evda
Sasha Evdakov (3 years ago)
+waqar usman Excellent... I am happy to hear you are working on adding value to people's lives. 
Pew Pew (3 years ago)
Great video, your explanations are always the best. 
Sasha Evdakov (3 years ago)
+Pew Pew Thank you :) Appreciate you watching and the fellowship...
Ermias Giovanni (4 years ago)
Great video Sasha. You have a good, clear teaching voice too. Thanks
Sasha Evdakov (4 years ago)
Thank you so much. I appreciate the feedback.

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