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 at particular date and the sale of the same instrument expiring another date. The legs of the spread vary only in expiration date; they are based on the same underlying market and strike price.
The usual case involves the purchase of futures or options expiring in a more distant month and the sale of futures or options in a more nearby month.
Read more about Calendar Spread: Uses, Futures Pricing
Famous quotes containing the words calendar and/or spread:
“To divide one’s life by years is of course to tumble into a trap set by our own arithmetic. The calendar consents to carry on its dull wall-existence by the arbitrary timetables we have drawn up in consultation with those permanent commuters, Earth and Sun. But we, unlike trees, need grow no annual rings.”
—Clifton Fadiman (b. 1904)
“The philanthropist too often surrounds mankind with the remembrance of his own cast- off griefs as an atmosphere, and calls it sympathy. We should impart our courage, and not our despair, our health and ease, and not our disease, and take care that this does not spread by contagion.”
—Henry David Thoreau (1817–1862)