The Calendar Spread Trap: Don't Make This Mistake

Calendar spreads trip people up in a sneaky way: you can do everything right, the trade works, and you still walk away with 9 cents. Dr. Jim Schultz explains why. Because the profit target on a calendar is only about 10 to 25% of the debit, you need a high-priced stock to make that percentage worth real money. Run it on a cheap name and a winning trade pays pennies. The fix: pick a higher-basis stock, like his Tesla example versus Bank of America. 📊 tastylive: https://www.tastylive.com/ 📰 Get Tom's pre-market analysis every morning: https://www.tastylive.com/newsletters 📘 FREE Options Strategy Guide: https://tinyurl.com/bp9ms763 📱 Follow tastylive on X: https://x.com/tastyliveshow Chapters 00:00 Let's talk calendar spreads 00:45 Why the profit target is so small 01:20 Pick a higher-priced stock 02:25 Setting up the Tesla calendar 03:40 Why your max loss is the debit 04:00 The Vega differential explained 05:15 Long back month wins on rising vol 06:00 The low-vol expansion play 07:00 The Bank of America counterexample 07:50 For every gimme, a gotcha #tastylive #knowyouroptions #jimschultz #calendarspread #vega #volatility #optionsforbeginners #timespread #optionstrading #stockmarket tastylive is a real financial network, producing hours of live programming every day. Follow along as our experts navigate the markets, provide actionable trading insights, and teach you how to trade. With over 120 original segments, and over 25 personalities, we'll help you take your trading to the next level, whether you are new to trading or a seasoned veteran. tastylive content is created, produced, and provided solely by tastylive, Inc. ("tastylive") and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read all applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange Traded Options Risk Disclosure Statement found at https://tastytrade.com/disclosures/. Past performance is not indicative of future results. Performance is not presented net of all commissions, fees, and expenses. Multi-leg option strategies incur higher transaction costs than single leg trades as they involve multiple commission charges. Examples provided are for illustrative, informational, and educational purposes only and are not intended to be reflective of results you can expect to achieve. Supporting documentation for any claims, including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer.