UpwardOnward

I have been making some nice Theta credit with Calendars the past few months with $CHK as its been gaining strength. Im not really sure why since inventories are high, but maybe its all the Eco hype that Nat. gas has been getting? not sure, don't care. But the premiums are high, and decent resistance near $30 so its ripe for churning the calls around that strike. I sold some $32 strikes for 15% gain. If I get called, Ill make 70+% on the underlying + the 15% in premiums. If I dont get called, I'll try and short more calls on volatility spikes here and there. These types of trades are good to get in low, as when you carry the underlying, you dont have much downside protection other than your stop loss, or buying a put, which takes more management (trade adjustment). If you get into the position low enough, it mitigates much of the risk, and you can just sell Theta each month for a little cash flow. Get in too late in the movement of the issue, and the trade becomes much riskier, even when taking in the premiums. Get into a Calendar early enough, and stick with it long enough, and you can end up with a free trade that keeps on paying you premiums every month, this is ideal.