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calendar spread

   Also found in: Wikipedia 0.06 sec.
Calendar spread
Applies to derivative products. A strategy in which there is a simultaneous purchase and sale of options of the same class at the same strike prices, but with different expiration date.
calendar spread
In options and futures trading, the purchase of one contract and the sale of another contract that differs from the first only by its delivery or expiration date. An example of calendar spread would be the purchase of a December call with a strike price of $20 and the sale of a June call with the same strike price. An investor would use a calendar spread in order to profit from a change in the price difference as the securities move closer to maturity. Also called horizontal spread, time spread.


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As a refresher, a calendar spread is where an investor will sell a short-term call (or put) and then buy a longer-term call (or put) at the same strike.
Schaeffer's Daily Market Blog Features: Genzyme, PepsiCo, Kinder ... by Business Wire
A calendar spread could be in the works; this would assume that the investor is selling the March position and purchasing the April call.
Schaeffer's Midday Options Update Features Google, Biogen Idec, Elan, ... by Business Wire
This are likely matched with similar trades at the March 25 call strike (PFE CE), as halves of a calendar spread.
Schaeffer's Midday Options Update Features PepsiCo, Cisco Systems, ... by Business Wire
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