Watched the video, interesting. So I have been working all day on this and for sure the profit numbers I posted are wrong. If market goes down, a call calendar spread will probable lose money. I just knew I was doing something wrong.
What I was ignoring was the value of the short call when it goes ITM. This can get very expensive very fast.
I put my IWM spread on when IWM was at 222.63. IWM closed today at 219.87 which means my short call is about to go ITM. So far the time decay has kept me right at zero loss. If the market goes up all kinds of good things start to happen.
Going back to that presentation and what I am missing is that the strike prices need to be set based on probability of option not going ITM. So I still have some work to do on this strategy.
But if SPY (and IWM) continues to go up, we should be fine.
I will have more info to present later. Getting formulas to calculate option price and delta has been invaluable.
Trade the Charts and not the Heart - Expect the trend to
continue until it doesn't - Realtime is the real deal
