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Calendar Spread Setup on Think-or-Swim Platform by SellTheta.com

Watch the Calendar Spread Setup on our Youtube video explaining the Calendar Spread.

A Calendar Spread is simply a short option in the front month and a long (purchased) option at the same strike price further out. The trade benefits by theta decay and possibly directional movement.

If you have questions about this type of trade, feel free to comment below.
In this educational video, you can learn how to put on a simple three month Calendar Put or Call Spread using the thinkorswim.com platform.  Additionally, we cover volatility issues, pricing, and things to look for, including the “VIX”.

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——- Narrative Below ——-
i’m gonna show you today out to do a
calendar spread
as you can see the market is on a
slight down day after reaching its all
time highs
of one sixty nine-o-seven and it’s
going down
it’s trying to recover a little bit
but i have a feeling that’s gonna fall
short and we’re gonna have a down day in
the end
however time in looking at this it’s
outside the channel
that
was created
and
it needs to come backat least the one
sixty two one sixty
area just to
back to the
moving average
i’m thinking we might have a little
downside after this as that’s
getting along in the market
so what i’m going to do is
price  a calendar of one sixty one
while the market still has fairly low
volatility
although it prior went up today
but i will show you what it looks like
to do it calendar spread in think or swim
platform
so you can see volatility has gone up a
little bit but it’s got a long way
to go before
it really has a great effect so we think
we have a little time to set up
the
spiders
calendar spread
and still benefit from some really low
volatility
set the spread
right here to calendar
and then what you’re going to do is go
down to the strike that you’re
interested in
and as you can see this is the put slide on
the right side the put side and the
call side is on the left
on a day like this you would
want to buy a put calendar because
as the market goes down the puts will
benefit greater
to default to at least
somewhere around one sixty one
put calendar but as you can see i have
it september two august
now there’s other ways to do this but i
found it’s just easier to just go to the
short month that you want
the front month being june twenty
thirteen
and then september
expiration
so we can get this option for about
three eighteen in fact on my first take
it was three fourteen so it’s
actually gone up a couple three cents
we may try to close at three
seventeen
and what you want this to do there’s
really no easy way to figure out what
this is going to be worth
in the future
however you do have some benefits to put
in on right now
with the low volatility assuming
it only goes up which would mean the
market’s going down
this
put calendar would be worth more
with volatility increasing
but also you’d have three roles in the
june to july,
july to august, then the august to
september too close
or
if the markets above or below your
one sixty one strike price
you could actually convert it to a
vertical for the last month and get a
little extra edge
what you might want to do if the
market’s down greatly issue might sell
the one sixty
or one fifty nine put at the last
role which would be into september
or if the market’s rather high you might
sell
you might go up a couple strikes to one
sixty two or one sixty three on the
short put to get a little extra edge
of course a vertical is another
trade but it’s an opportunity to make a
little extra money on this trade
at the last month

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