Calendar Spread Calculator
Calculate potential returns for calendar spreads. Profit from time decay differences between near-term and longer-term options.
A calendar spread (or time spread) involves selling a near-term option and buying a longer-term option at the same strike. You profit from the faster time decay of the short option while the long option retains value.
Current price: $100.00
Typically 30-45 days to expiration
Typically 60-90 days to expiration
Max Profit
$200.00
Max Loss
$300.00
Note: Calendar spread P&L depends heavily on implied volatility changes. This calculator shows approximate values at front-month expiration.
Net Debit
$300.00
Target Price
$100.00
Understanding Calendar Spreads
Calendar spreads exploit the difference in time decay between options with different expirations. Near-term options decay faster than longer-term options, creating a profit opportunity.
Key Characteristics
- Same strike price, different expirations
- Sell near-term, buy longer-term
- Profits from time decay differential
- Benefits from increasing IV
- Max profit when stock at strike at short expiration
Key Formulas
Net Debit
Net Debit = Long Premium - Short PremiumMaximum Loss
Max Loss = Net Debit PaidRelated Calculators
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