For this segment of Options Jive, Tom and Tony discuss how we can trade smaller with lower priced underlyings. Given the lower commission world we now live in, it’s possible to replicate larger positions with their corresponding ETFs.
Much of our recenttrading and research has focused on .
- Put calendar spreads
- Long the 40 Put (60+ DTE)
- Short same strike Put (30+ DTE)
- for: 10%, 25%, or 50% Return on capital
We take a look at how lower priced ETFs such as XLF, GDX, SLV, and EEM perform with this strategy.
Cheaper ETF products do not make good candidates for calendar spreads due to the lower profit potentials.