Building A Calendar Ratio Strangle
This is for educational purposes only. Please do not execute this trade, or assume that it is a recommendation. It was only created to demonstrate the capabilities of OptimalTrader Options Analysis software.
I would like to discuss in this article a particular trading scenario. Let’s say that we have a pharmaceutical stock that currently has low implied volatility for its range. So in this case, it would be a good time to be a buyer of options. One of the risks of buying options is that they are sensitive to decreases in implied volatility, this is called vega. So to lessen this risk, buy options, especially long term options and out of the money options when IV is low for that stock.
The background of this trade is as follows. On our historical option data site, we run a daily search for cheap calendar trades, iron condors, and other trades. On June 15th, I saw BMY on one of the lists, and then I looked at its IV historical graph. 
So it seemed to be a possible candidate for buying some out of the money options, in hopes that talks of the government take over of the medical insurance industry might cause some increase in volatility over the next few months.
Here is what the final outcome of this trade looks like in this article: