Long Put Calendar Spread

Description

Selling a near-term Put and buying a long-term Put.

Trading Logic

Profits from the difference in time decay of Put options.

Practical Example

Stock at $100. Sell near-term $100P, buy long-term $100P.

P/L Curve

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