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Options involve substantial risk and are not suitable for all investors. OptionSpire provides educational tools and information only, not investment advice. Risk Disclosure

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Options strategy calculator

Calendar Spread Calculator

A Calendar Spread (also called a Time Spread) sells a near-term option and buys a longer-term option at the same strike. It profits from the faster time decay of the short-term option.

Calculate This Strategy
Illustrative modeled P/L at front-leg expirationNeutral with time decay advantage
Assumes fixed IV 30%, front 21d, back 51d
Calendar Spread Calculator example payoff diagramMaximum profit typically occurs when the underlying is near the strike at the near-term expiration. The position benefits from time decay differences and can also profit from volatility increases in the long-term option.UNDERLYING PRICEPROFIT / LOSS
Illustrative model. Maximum profit typically occurs when the underlying is near the strike at the near-term expiration. The position benefits from time decay differences and can also profit from volatility increases in the long-term option.

Outlook

Neutral with time decay advantage

When it fits

Use this calculator when you expect the underlying to stay near a specific price in the short term while maintaining a longer-term position to capture future moves or volatility.

Risk note

Calendar Spreads are sensitive to volatility changes. If volatility drops significantly or the underlying moves far from the strike, both legs can lose value.

Calendar Spread Calculator FAQs

How does a Calendar Spread profit from time decay?

The short-term option decays faster than the long-term option. If the underlying stays near the strike, the short option expires worthless while the long option retains significant value.

What happens at the first expiration?

At the near-term expiration, the short option expires. The trader is left with the long-term option and can choose to exit, hold, or sell another short-term option against it.

Related Strategies

Explore similar approaches and alternatives to find the best fit for your market outlook.

Alternative Approaches

Different ways to achieve similar or opposite goals

Bull Call Spread

Moderately bullish

A Bull Call Spread buys one call at a lower strike and sells one call at a higher strike with the same expiration. Both risk and profit potential are defined at entry, and the net cost is lower than buying a call outright.

Iron Condor

Neutral (range-bound)

An Iron Condor combines a bull put spread and a bear call spread. It profits when the underlying stays within a defined range between the short strikes, collecting premium from all four options.

Simpler Options

Easier strategies with fewer legs

Long Call

Bullish

A Long Call buys one call option and gives the holder the right to buy shares at the selected strike before expiration. It is a defined-risk position that can benefit when the underlying price rises.

Open Calculator to Compare Strategies

Educational use only. Options involve risk and this calculator does not provide investment advice or guarantee an outcome.