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Strategies & Market Trends : Option Spreads, Credit my Debit -- Ignore unavailable to you. Want to Upgrade?


To: KFE who wrote (1895)1/8/2001 5:07:02 PM
From: KFE  Read Replies (1) | Respond to of 2317
 
Had an IMCL call calendar spread working that met my criteria in the previous post but nothing was done. Tried to split the bid/asked spread. This option chain has a number of possibilities for trading short term volatility skews using straight calendar spreads and diagonal calendar spreads. I will continue to monitor it for the next couple of days.

Regards,

Ken



To: KFE who wrote (1895)1/9/2001 12:54:07 AM
From: mozoneman  Read Replies (2) | Respond to of 2317
 
Ken,

Your take on the following IBM spreads is appreciated:

Two spreads are considered simultaneously, using 1 PUT and 1 CALL to bet on both directions.

Buy Feb 80, Sell Jan 80 PUTS for 1 5/16
Buy Feb 105, Sell Jan 105 CALLS for 2

If IBM fluctuates between 90 and 100 next 2 weeks, those 2 spreads should make money because the shorts expire worthless and I can sell the longs.... If IBM moves out of range, at least one spread should make money...

What's wrong with this strategy, and how can you improve on it ?

Thank you for your advice.

Huan