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Long Calendar Call Spread


calendar call spread that is established by selling a front-month call option at a given strike price and buying a back-month call option at the same strike price. An investor could pursue this strategy on the expectation that the underlying will be very close to the strike price when the front-month option expires. The maximum profit from this spread is limited to the premium received from the back-month short call minus the premium paid to buy the front-month call, taking into account the net debit amount expensed to created the spread. However, the highest potential loss that could be incurred on this position is confined to the net debit amount.

The long calendar call spread is also called a long call calendar spread.


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