Double Calendar

You're entering TWO calendar spreads instead of one, so you pay two debits. The trade-off is a much wider profit zone. If uncertain about exact price, the wider zone often justifies the extra cost. Think of it as insurance premium for wider coverage.

That's the 'valley' - you still profit, just not as much as at the peaks. Both calendars contribute partial profit at the midpoint. For example, if peaks are A$180 profit each, the valley might be A$100 profit. Still positive, just not maximum.

Yes, you can use all puts, all calls, or a mix. At ATM strikes, the profit profile is nearly identical. Some traders use put calendars at lower strikes (better put skew) and call calendars at upper strikes. Choose based on liquidity and term structure.

Roughly 50-80% wider depending on strike spacing. If a single calendar profits in a A$4 range, a double calendar with the same expirations might profit in a A$7 range. The exact widening depends on where you place the strikes.

The worst case is the stock moving FAR beyond either strike - either crashing well below the lower strike or rallying well above the upper strike. In these cases, all four options lose their calendar spread value, and you lose the total debit paid.

Not necessarily. If you have a slight directional lean, offset the strikes. For mildly bullish, place both strikes slightly above current price. For mildly bearish, both slightly below. For truly neutral, center them around current price. Match structure to outlook.

Close one if: Stock is at that strike (max profit there), you want to lock in partial profit, or you want to let the other run for recovery. Close both if: Stock has broken far outside the range, thesis has changed, or you've hit overall profit target. Think of them as semi-independent positions.

Because IV changes affect your position twice as much. A 5-point IV drop might cost A$150 on a single calendar but A$300 on a double calendar. This makes IV monitoring critical. The trade-off is that IV increases also help you twice as much.

Yes, simply close one of the calendar positions. If stock has moved to the lower strike, close the lower calendar (take profit) and you now have a single calendar at the upper strike. This is a common adjustment when the original neutral thesis becomes more directional.

Deep valley (narrow strikes): You need stock to hit one of the peaks for good profit. Position is more 'binary' - at peak or disappointing. Shallow valley (wide strikes): More consistent profit across the range. Lower peaks but less reliance on exact price. Match valley depth to your certainty about the range.

For each strike: Carry = (Front IV - Back IV) × Vega × Expected Days. Sum across both calendars. Example: Lower strike carry = (32% - 29%) × A$8 × 0.03 = A$0.72/day. Upper strike carry = (28% - 28%) × A$8 × 0.03 = A$0. Total carry = A$0.72/day. Positive carry indicates favorable term structure.

When you have directional conviction but want to maintain theta income. 2 calendars at the strike you expect, 1 at the opposite side for hedge. Also useful when term structure is much better at one strike - overweight the strike with edge. The asymmetry should match your market view.

Add a short vega component: Sell a small put spread at lower strike or call spread at upper strike. The vertical spread is short vega, offsetting some of the calendar's long vega. This converts the structure to more of a 'calendar condor' with reduced vega sensitivity.

Research suggests 1:2 to 1:2.5 ratio works well. Front 28 DTE, Back 56-70 DTE. Too short front (<21 DTE) has excessive gamma risk. Too long back (>90 DTE) has reduced theta differential. The 1:2 ratio maximizes theta decay differential while maintaining manageable gamma.

Use historical IV data for BOTH strikes and BOTH months (four IV time series). Model bid-ask spread for all four legs. Include rolling costs if testing multi-cycle strategies. Compare to benchmarks (single calendar, iron condor) on same underlying and period. Track Greeks attribution to understand profit sources.