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Calendar Spread

 
Investment Dictionary: Calendar Spread

An options or futures spread established by simultaneously entering a long and short position on the same underlying asset but with different delivery months. Sometimes referred to as an interdelivery, intramarket, time or horizontal spread.

Investopedia Says:
An example of a calendar spread would be going long on a crude oil futures contract with delivery next month and going short on a crude oil futures contract whose delivery is in six months.

Related Links:
Learn why option spreads offer trading opportunities with limited risk and greater versatility. Option Spread Strategies
For those who are new to futures but want a solid understanding of them, this tutorial explains what futures contracts are, how they work and why investors use them. Futures Fundamentals


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Options strategy that entails buying two options on the same security with different maturities. If the Exercise Price is the same (a June 50 call and a September 50 call) it is a Horizontal Spread. If the exercise prices are different (a June 50 call and a September 45 call), it is a Diagonal Spread. Investors gain or lose as the difference in price narrows or widens.

 
 

 

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Investment Dictionary. Copyright ©2000, Investopedia.com - Owned and Operated by Investopedia Inc. All rights reserved.  Read more
Financial & Investment Dictionary. Dictionary of Finance and Investment Terms. Copyright © 2006 by Barron's Educational Series, Inc. All rights reserved.  Read more