Nifty calender spread with calls or puts

I am trying to learn calender spreads.

There are two advantages of using them.

Margin requirement is much lower and max potential loss is known upfront.

The strategy will be successful when minimum movement is expected.

May be, it will not be useful during current volatile movement of nifty. However, I would like to prepare for it whenever volatility of nifty reduces.

I am trying to analyze the strategy on OptionsOracle.

If one enters strategy with calls with one lot,
Sell 7650CE JUL @ 82.70
Buy 7650CE AUG @ 129.90

On 31 July,
Max profit 3933

Max loss 2360

loss @ NS 7200, 1870
loss @ NS 8000, 1230

One could enter with similar trade with Puts.

Option Experts and Practitioners may please comment on the following;

1.How does it compare with iron condor?

2.Considering lower margin requirement , will the percentage returns be better
than Iron Condor.

3.What are the possible modifications to reduce possible loss.

4.Any other point I may have missed.

Thanks and reagards,
gmt

gmt,

Good line of thought. However, I have a point of worry.

For,

Sell 7650CE JUL @ 82.70
Buy 7650CE AUG @ 129.90

The Sold July CE can quickly get out of hand. A 100 point up move could make the spread unmanageable, where July7650CE would threaten to close ITM at July expiry... and Aug will only appreciate in premium, which is the reason why I do not think that the max loss is limited.

In short, shorting options in last two weeks is a nefarious task. I would be more inclined towards selling Aug v/s Sept.

Sorry, there is a correction,

AUG 7650CE is 155.2 and not 129.9.

Max loss therefore would be 3625 and max profit would be 2670.

I suppose if I close the trade on or before 31 July, I will incur max loss of 3625.It will not be unlimited. And just like Iron Condor, we should be able to manage the trade to reduce or eliminate loss. How? that is the question I have asked in my post.

Sorry, there is a correction,

AUG 7650CE is 155.2 and not 129.9.

Max loss therefore would be 3625 and max profit would be 2670.

I suppose if I close the trade on or before 31 July, I will incur max loss of 3625.It will not be unlimited. And just like Iron Condor, we should be able to manage the trade to reduce or eliminate loss. How? that is the question I have asked in my post.

If one enters calender spread for AUG/SEP, Max profit would be 4018 and max loss would be 2240

Theoretically unlimited. Cuz, when ITM, July premium will gain more.

@Gmt900

What is the different between this post http://www.traderji.com/options/94802-nifty-calender-spread-calls-puts.html#post985895 and this post: http://www.traderji.com/options/94802-nifty-calender-spread-calls-puts.html#post985896. I have seen you doing the same in the thread from Toughhard just by adding one sentence after a few minutes to the original text you wrote and then making again a new post just after the first one. Did you know that you can use the "Edit" tool for 24 hours?? Take care and have a nice weekend

I try to edit the mail but somehow am not able to do it sometimes. Will try to see that this is not repeated

Never mind.

Now to your point four in your post: Depending how you want to trade this idea, there you could ad many ideas how to trade such a calendar spread. If your idea is to implement it at once, then you can do it the way you mentioned by knowing all the risk factors and how to handle them. If you want to leg in, you buy first the Aug call, manage that call into profit and later you sell the July call. Here you have various ways to play this game in case you want to play the leg in game. Just a little ad to how calendars can be played. Take care / Dan

-To make a calender spread 'like' iron condor , one would need to place two calender spreads one each above & below LTP (double calender spread).
-Is there a substantial difference between margin for iron condor & double calender .
-you can also consider double diagonal later (kind of hybrid of iron condor & double calender)

good luck.

I suppose, when one uses the tool of option spreads, RR should not be the decisive factor, but the strike rate should be.

I mean, in option trading although the RR may be as low as 1:1 (or less), the trader must leave himself enough flexibility/room/scope to be able to manage the said spread as and when the need be.

Selling an option that is about to expire in 9 sessions does give very good RR, but I'd rate it very low on manageability.