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 ?
Benchmark crude oil prices and calendar spreads have been softening slowly but steadily for the last two months.
Further to this, the listing of additional calendar spreads on key products has increased confidence in the marketplace.
New products launched in 2017 - Shanghai Gold, Calendar Spreads, Additional Indian SSF
Also, on the heels of the successful addition of 'Calendar spreads' on Gold and G6 Currency contracts in June, the Exchange will introduce calendar spreads in WTI and Brent contracts promoting its Energy products portfolio.
The understanding was initially successful between December 2016 and February 2017, with reports of strong compliance from OPEC, spot prices rising $10 per barrel and calendar spreads moving from contango to flat or, albeit briefly, backwardation.
Brent calendar spreads for the six months between June and December have weakened sharply over the last four weeks.
RealTick would also provide raised spread-trading functionality and the ability to combine futures legs to create exchange-supported calendar spreads.
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.
That's where the trade players are active - in the calendar spreads.
The report also gives a good idea about calendar spreads and futures- spot basis (arbitrage opportunity).
Calendar Spreads are designed for traders to benefit from the difference in movement between near term futures contracts and longer term futures contracts.
G6 currencies continued their upward trajectory in June 2017 vis-a-vis the same period last year with volumes up in Japanese yen (313 per cent), euro (56 per cent), Canadian dollar (815 per cent) and Swiss franc (692 per cent); aided by the aforementioned calendar spreads.