calendar spread

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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.

Time Spread

An options strategy in which an investor takes the same position in two different option contracts that are identical in every way except the expiration date. For example, an investor utilizing a time spread strategy may buy or write two puts on the same underlying asset at the same strike price; the only difference is that one of the puts has a longer expiration. A time spread allows the investor to profit from the difference in price on the underlying asset between the two expiration dates. It is also called a horizontal spread and a calendar spread.

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.
References in periodicals archive ?
RealTick would also provide raised spread-trading functionality and the ability to combine futures legs to create exchange-supported calendar spreads.
96% of Friday's trades were matched in the Exchange's anonymous, central limit order book, including 12,408 contracts that traded as calendar spreads.
Calendar spreads are less volatile than other forms of trading including share trading, option trading and straight futures trading.
The strong basis across the US, strong calendar spreads, and the fact harvest is all but complete in the west suggests a positive outlook to the corn market.
John Cross, a founding partner of oil brokerage firm Daman Quattro, said, "What is particularly important to note about these latest volumes on the DME is that they include all the different types of trading possible on the exchange, from screen and block trading to butterfly and calendar spreads and, of course, physical trading.
That's where the trade players are active - in the calendar spreads.
involving calendar spreads and relative value in the emissions markets.
The report also gives a good idea about calendar spreads and futures- spot basis (arbitrage opportunity).
In addition, Eurex Exchange participants will benefit from the improved functionality, including enhanced calendar spreads and user-defined strategies as well as from streamlined processing and reporting.
Calendar spreads continue to hold up rather well against the choppy trade this week with the December vs.
Vessel loading has come to a halt as a result which could support nearby calendar spreads.
Options on calendar spreads will enable customers to mitigate the risk of changing price differentials between successive futures contract months when rolling from one futures contract month to another.