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+778 Part VI: Measuring and Trading Volatility 
+FIGURE 37-9. 
+Bear put spread profit in 30 days. 
+1000 IV= 30% 
+Assignment 
+Risk 
+Area 
+(/) 
+(/) 
+0 
+...J 
+~ 0 
+e 70 80 110 120 130 140 
+a. 
+ff7 
+IV= 80% 
+-1000 
+'~ 
+Stock 
+problem, though, since the spread would have widened to its maximum potential in 
+that case and could just be removed when the risk of early assignment materialized. 
+When implied volatility remains high, though, the spread doesn't widen out 
+much, even when the stock drops a lot after 30 days. Since it is common for implied 
+volatility to rise (even skyrocket) when the underlying drops quickly, the put bear 
+spread probably won't widen out much. That may not be a psychologically pleasing 
+strategy, because one won't make the level of profits that he had hoped to when the 
+underlying fell quickly. 
+Once again, it seems that the outright purchase of an option is probably superi­
+or to a spread. In these cases, it is true with respect to puts, much as it was with call 
+options. Spreading often unnecessarily complicates a trader's outlook. 
+CALENDAR SPREADS 
+In the earlier chapter on calendar spreads, it was mentioned that an increase in 
+implied volatility will cause a calendar spread to widen out. Both options will become 
+more expensive, of course, since the increase in implied volatility affects both of 
+them, but the absolute price change will be greatest in the long-term option. 
+Therefore, the calendar spread will widen. This may seem somewhat counterintu­
+itive, especially where highly volatile stocks are concerned, so some examples may 
+prove useful.