Comments on: Double Calendar on MO http://www.optionsropeadope.com/2008/03/26/double-calendar-on-mo/ Thoughts, Trades, and Instruction for Profiting from Options the Smart Way Sun, 05 Feb 2012 11:10:57 +0000 http://wordpress.org/?v=2.0.3 by: doug http://www.optionsropeadope.com/2008/03/26/double-calendar-on-mo/#comment-6 Tue, 22 Apr 2008 02:22:33 +0000 http://www.optionsropeadope.com/2008/03/26/double-calendar-on-mo/#comment-6 the idea of a double calendar is to make money on time decay, so you absolutely want postive theta, that is good. -2 delta is great as you don't have a lot of price movement risk. be careful of Vega risk -- the 75 vega says that for every 1% increase in volatility you will make $75 on this position, conversly, you also LOSE $75 for every 1% the volatility decreases - goes lower. Therefore you always want to make sure you are buying calendars when the Volatiliy is at lows so if the volatility goes up and your position increases in value. the idea of a double calendar is to make money on time decay, so you absolutely want postive theta, that is good.

-2 delta is great as you don’t have a lot of price movement risk.

be careful of Vega risk — the 75 vega says that for every 1% increase in volatility you will make $75 on this position, conversly, you also LOSE $75 for every 1% the volatility decreases - goes lower. Therefore you always want to make sure you are buying calendars when the Volatiliy is at lows so if the volatility goes up and your position increases in value.

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