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Bonus Trade: Calendar Options — RTH June/July Double-Calendar
With 36 days until June expiration, this is a good time to open a calendar position. At this point in the cycle, we’re considering single (one strike) calendar spreads; however, single calendars are best opened at the money, and RTH is trading just about dead center between the 95 strike and the 100 strike. With economic conditions still questionable, we don’t want to be bullish and use the 100 strike, but the strength that the market has been showing is reason enough not to be too bearish and pick the 95 strike either. Therefore, we’re going to make this another double calendar. Were opening the following double-calendar spread on RTH: +2 RTH July 100 call Our break-even points are at $93.40 and $101.90. Target profit is $0.35, and our stop-loss is $0.40—but we expect to be able to adjust the trade long before getting there. As with our EEM double-calendar, we’re trading an even number of contracts to create a position that can be split if adjustment is needed. by CondorTrader (Condor Options) Disclaimer: Please note that charts and commentary provided by the moderator are for educational purposes only. Any trades placed upon reliance on the moderator’s charts or information is taken at your own risk for your own account. Past performance is no guarantee of future results. While there is great potential for reward trading stocks, futures and options, there is also substantial risk of loss and you must decide your own suitability to trade. Future trading results can never be guaranteed. This is not an offer to buy or sell stock, futures, options or commodity interests. Most trading systems are based on historical formulas which have worked in the past. However, what has happened before may or may not happen again. You can lose all your money trading stocks, futures, and options and you must decide your own suitability as to whether or not to trade. Only trade with true risk capital you can afford to lose. Only trade markets you can properly afford to trade. Properly funded trading accounts typically perform better than those that are not. Never risk more than 2-3% of your account on any one trade. Always define your risk before entering a trade and place a stop to limit your risk. There are no guarantees or certainties in trading. Trading involves hard work, risk, discipline and the ability to follow rules and trade through any tough periods during a system’s draw downs. If you are looking for a guarantee, trading is probably not for you. Most people lose money trading. One of the reasons is that they lack discipline and are unable to be consistent. A system can help you become consistent. Ironically, worrying about the monetary aspect of trading can contribute to and cause a trader to make trading errors. Therefore, it is important to only trade with true risk capital. |
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