Calendar Spread Strategy
NeutralIntermediateTime Spread
Profit from time decay differences by selling near-term and buying long-term options at the same strike.
How It Works
1
Sell Near-Term: Sell option with shorter expiration for premium income.
2
Buy Long-Term: Buy same strike option with longer expiration for protection.
3
Time Decay Profit: Near option decays faster than far option, creating profit.
Key Metrics
Max Profit:At strike price, near expiration
Max Loss:Net Debit Paid
Sweet Spot:Stock at strike price
Time Decay:Benefits position
Best Case:Stock pins at strike