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The stock rallied back up, and I ultimately made money on the trade.
A calendar spread involves selling a shorter-term option and buying a longer-term option with the same strike price. The ideal scenario is for the underlying asset to trade near the strike price, allowing the short-term option to expire worthless while the long-term option retains value. The risk is limited to the debit paid for the spread, and the potential reward is typically between 20% to 50% of that debit. This strategy is low-risk and low-reward, making it suitable for learning purposes.
If you're going to trade the one-day option, that's completely different. If you have an open position on, it's going to be in May. So, you go to at least the expected move. I like to go to two times the expected move or one and a half times at a minimum. Knowing that earnings are on the horizon, would you back away from opening a new trade in that particular underlying prior to earnings? If you're going to put a trade on now and Apple is 2 weeks from today, you know, so you're going to look at 43 days, you know, you can go out to the 43 day, put your trade on, and then come 2 weeks from today, the day before earnings, as you said, modify as need be. So, if the stock has, you know, if the position's come in, you might consider taking it off and putting on something else. You know, if you like the position, from my perspective, it'd be the same thing. Move it to adjust it so that you're at whatever the, you know, the strikes from a standard deviation standpoint you want.