Weekly options calendar
Weekly calendar spread: Yesterday I added a GLD trade to the OptionGenius.com portfolio and I mentioned that GLD might be a good candidate for a Calendar Spread. Several members emailed me asking to explain how to set up the option trade and the parameters so I decided to just post it on the blog. I tried making a video but I am a total non techie and screwed up the video. I got it uploaded to Youtube but everything on the screen is so small you cannot see what I am doing.
Anyway, here are some screenshots of the trade.
The trade was to Sell the Oct 125 Calls and Buy the Nov 125 Calls. That sets up a simple calendar. You can use puts or calls, they are interchangeable but the puts are usually cheaper. The plan is to adjust when GLD hits a breakeven. The simplest adjustment is to just add another Calendar Spread at the money. This will double your capital in the trade but will give GLD more room to run around.
This option trade was put on today before the FED announcement and since then GLD has moved up about $1.
Got questions? Drop us a note in the comments section and please go check our previous blog posts for useful stock market option trading and options selling tips.