calendar spread

A strategy in options or futures where a spread is established by entering both a long and short position at the same time on the same underlying asset but with different expiration dates.

Also known as an inter-delivery or time spread. An example would be going long on a crude oil futures contract that expires in a month and short on a crude oil futures contract that whose delivery is in four months. Different types of calendar spreads include horizontal, exercise price, and diagonal.

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