time spread

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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.

time spread

References in periodicals archive ?
Horizontal Spreads. A horizontal spread (also referred to as a time or calendar spread) is the simultaneous purchase and sale of puts or calls with the same underlying security and strike price, but with different expiration dates.
A diagonal spread is a combination of a vertical spread and a horizontal spread; thus, it is the simultaneous purchase and sale of puts and calls with the same underlying security but with different strike prices and expiration dates.