Options Outlook: Calendar Spread Screener Results for January 6th

Core Insights - Calendar spreads are an options strategy that allows traders to benefit from time decay and changes in implied volatility [1] - This strategy involves selling a short-term option while buying a longer-term option at the same strike price, which can be structured with calls or puts for various market outlooks [1][2] Group 1: Strategy Overview - Calendar spreads are typically used when traders expect limited price movement in the short term but anticipate increased volatility or directional moves later [2] - The strategy can be applied to both bullish and bearish market conditions [2] Group 2: Trade Examples - The Barchart Long Call Calendar Screener highlights potential calendar spread trades on stocks like Delta Airlines (DAL), Netflix (NFLX), Morgan Stanley (MS), Wells Fargo (WFC), and Bank of America (BAC) [3] - For Delta Airlines, a calendar spread at a $70 strike price involves selling a January 16 call option and buying a March 20 call option, costing approximately $2.55, with a maximum profit potential of $230 [4] - The breakeven prices for the Delta Airlines trade are estimated at around $64.75 and $76.75, which may vary with changes in implied volatility [5] Group 3: Trade Management - If Delta Airlines stock breaks through $65 or $77, adjustments or closure of the trade would be considered [6] - For Netflix, a similar calendar spread could be set up by selling the $95-strike January 23 call and buying the $95-strike March 20 call, with the stock currently trading at $91.46 [7]