C
   
   Calendar Spread
   















 

C

Calendar Spread

Value of a Calendar Spread
Margin rules dictate that the option purchased in a calendar spread expires after the option sold. The number of contracts purchased equals the number sold and both options have the same strike price. For example, an investor who buys a December 80 call and sells a September 80 call is said to buy the Sept-Dec 80 call (calendar) spread. A calendar spread will be most profitable when the price of the underlying is very close to the strike on the expiration date of the short option. Also called Horizontal Spread, Time Spread. See also Bear Spread (diagram), Bull Spread (diagram), Call Spread.

Glossary * C