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 ?
Hong Kong Exchanges and Clearing Limited (HKEX) announced that it will offer the sixth calendar quarter month contract and 19 additional calendar spreads for its USD/CNH Futures (US dollar/Offshore Renminbi, or RMB, Futures) from the day trading session on 19 June 2018.
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.
OPEC committed to implement credible production cuts and reduce global crude stocks while hedge funds responded by establishing bullish long positions in both flat prices and calendar spreads. OPEC effectively underwrote the fund managers' bullish positions by providing the oil market with details about output levels and public messaging about high levels of compliance.
Brent calendar spreads for the six months between June and December have weakened sharply over the last four weeks.
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. So if backwardation is starting to disappear it suggests a lack of demand for actual crude."
Dubai Gold and Commodities Exchange (DGCX), the region's largest and most diversified derivatives bourse, witnessed a surge in Gold and currencies trading in June, which can, in part be attributed to the recent listing of additional 'Calendar spreads' on the Exchange's Gold Futures and G6 Currency contracts.
'Calendar spreads' also known as 'Futures or Intermonth Calendar Spreads' are a set of futures trading strategies that utilises future contracts of different expiration months on the same underlying asset.
RealTick would also provide raised spread-trading functionality and the ability to combine futures legs to create exchange-supported calendar spreads.