Calendar Spreads by Joe Corona and Bill Winger
ARTICLE SYNOPSIS ...Calendar Spreads by Joe Corona and Bill Winger
Look at the different ways you can use this strategy.
The calendar spread, also known as the time spread or the horizontal spread, is so called because it exploits differences in time value between options. Time value is the difference between the option's market price and its intrinsic value. The magnitude of the time value depends on a number of variables, including the strike price of the option, the price of the underlying, and the implied volatility of the option.
The calendar spread is composed of two options of the same type (both puts o...