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In finance, a calendar spread (also called a time spread or horizontal spread) is a spread trade involving the simultaneous purchase of futures or options expiring on a particular date and the sale of the same instrument expiring on another date. These individual purchases, known as the legs of the spread, vary only in expiration date; they are ...
Calendar spreads are executed with legs differing only in delivery date. They price the market expectation of supply and demand at one point in time relative to another point. [3] A common use of the calendar spread is to "roll over" an expiring position into the future.
A jelly roll, or simply a roll, is an options trading strategy that captures the cost of carry of the underlying asset while remaining otherwise neutral. [1] It is often used to take a position on dividends or interest rates, or to profit from mispriced calendar spreads.
In derivatives trading, the term diagonal spread is applied to an options spread position that shares features of both a calendar spread and a vertical spread.It is established by simultaneously buying and selling equal amount of option contracts of the same type (call options or put options) but with different strike prices and expiration dates.
If, on the other hand, the spread between a future traded on an underlying asset and the spot price of the underlying asset was set to widen, possibly due to a rise in short-term interest rates, then an investor would be advised to sell the spread (i.e. a calendar spread where the trader sells the near-dated instrument and simultaneously buys ...
In options trading, a vertical spread is an options strategy involving buying and selling of multiple options of the same underlying security, same expiration date ...
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A short calendar spread, a financial trade on futures or options which are expected to fall in value Topics referred to by the same term This disambiguation page lists articles associated with the title Short calendar .