Double Calendar Spread

Description

Simultaneously establishing a Call calendar and a Put calendar.

Trading Logic

Profits from time decay near two different strike prices.

Practical Example

Stock at $100. Establish $90P calendar and $110C calendar.

P/L Curve

Chart Description
  • X-Axis: Stock price at expiration
  • Y-Axis: Expected P/L ($)
  • Green area: Profit; Red area: Loss