Long Calendar Spread Option. For example, a position which is long june calls. The strategy most commonly involves calls with the same strike (horizontal spread), but can also be done with different strikes (diagonal spread).
A long calendar spread is a neutral options strategy that capitalizes on time decay and volatility, rather than focusing on the movement of the underlying stock. The idea is to profit from the rapid time decay of the near.
A Calendar Spread Takes Advantage Of The Pricing Differential That May Start To Develop Between A Front Month Option And A Back Month Option.
Entering into a calendar spread simply involves buying a call or put option for an expiration month that's further out while simultaneously selling a call or put.
The Strategy Most Commonly Involves Calls With The Same Strike (Horizontal Spread), But Can Also Be Done With Different Strikes (Diagonal Spread).
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ยง Short 1 Xyz (Month 1) 100 Call ยง Long 1 Xyz (Month 2) 100 Call
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Both Put Options Will Have The Same Strike Price.
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A Calendar Spread Is An Option Or An Future Trade Strategy Which Works On Simultaneously Entering In A Long &Amp; A Short Position For The Same Underlying Asset But On A Different.
Long put calendar spreads will require paying a debit at entry.
Entering Into A Calendar Spread Simply Involves Buying A Call Or Put Option For An Expiration Month That's Further Out While Simultaneously Selling A Call Or Put.