What happens when my short call expires?

If it expires worthless (stock below strike), great — you keep the long call and can sell another near-term call against it, effectively repeating the strategy. If it's ITM, you'll need to manage or close it before assignment.

Is this a good strategy around earnings?

Only if you're selling the near-term call that includes the earnings date and buying a longer-dated call that doesn't get as much IV crush after the event. Some traders specifically structure calendars to benefit from the IV differential around known catalysts — but this needs real practice before trading it live.

How much capital does this typically need versus a long call?

Less than a standalone long call at the same strike, since the premium from your short call partially funds the long call. It's a capital-efficient way to hold long-dated exposure.

Option StrategiesUptrend (Bullish)Bullish Calendar Spread

🔼 Uptrend (Bullish)Risk: Limited

Bullish Calendar Spread

Sell a near-term call and buy a longer-term call at the same OTM strike. You're betting time decay hits your short call faster than your long call, while positioning for the stock to drift up toward that strike over time.

AI Overview & Quick Answer: Bullish Calendar Spread

AEO Direct Citation Box

Bullish Calendar Spread is a uptrend (bullish) options trading strategy (2 legs) engineered for limited risk profiles in low iv expecting iv expansion market environments.

Market Sentiment🔼 Uptrend (Bullish)

Max ProfitValue of Long Call at Near Expiration - Net Debit

Max LossNet Debit Paid

BreakevenDynamic (Depends on implied volatility)

Option Legs Construction:

SELL 1x CALL at OTM Strike (Near Term)
BUY 1x CALL at OTM Strike (Long Term)

🔼 Uptrend (Bullish)

Payoff Profile & Metrics

Risk: Limited

IV: Low IV expecting IV Expansion

Profit (+)Profit/Loss at Expiration vs Asset PriceLoss (-)

Expiration Payoff Curve

Breakeven Threshold

Max Profit

Value of Long Call at Near Expiration - Net Debit

Max Loss

Net Debit Paid

Breakeven Formula

Dynamic (Depends on implied volatility)

Leg Setup Architecture (2 Legs)

Action	Contract Type	Strike Selection	Quantity
SELL	CALL	OTM Strike (Near Term)	1x
BUY	CALL	OTM Strike (Long Term)	1x

Strategy Masterclass & Guide

### What is a Bullish Calendar Spread? This one's a favorite for traders who understand theta and want it working *for* them instead of against them. You sell a near-term call and buy a longer-term call at the same strike. The near-term call decays faster (theta accelerates as expiry approaches), so ideally it loses more value than your long call does over the same stretch of time. The sweet spot: the stock drifts up slowly and sits near your strike right as the short call expires. Too fast a move, or too flat, and the trade underperforms.

Frequently Asked Questions about Bullish Calendar Spread

Because this trade's value depends heavily on implied volatility, not just price. A shift in IV between the near and far expiry changes your P&L even if the stock price doesn't move — that's what makes calendars trickier to price mentally than a simple spread.

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Bullish Calendar Spread

AI Overview & Quick Answer: Bullish Calendar Spread

Payoff Profile & Metrics

Leg Setup Architecture (2 Legs)

Strategy Masterclass & Guide

Frequently Asked Questions about Bullish Calendar Spread

Related Uptrend (Bullish) Strategies

Bull Call Spread

Call Ratio Backspread

Long Call

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