A time-decay play at its core. Sell a near-term option, buy a longer-term one at the same strike, and let the faster decay on your short leg outpace your long leg while the stock hovers near that strike.
Calendar Spread is a sideways / range-bound options trading strategy (2 legs) engineered for limited risk profiles in low iv expecting expansion market environments.
Value of Long Option at Short Option Expiration - Net Debit
Net Debit Paid
Dynamic Range around Strike
| Action | Contract Type | Strike Selection | Quantity |
|---|---|---|---|
| SELL | CALL | ATM Strike (Near Expiration) | 1x |
| BUY | CALL | ATM Strike (Far Expiration) | 1x |
The bread-and-butter income trade for a range-bound market. Stack a Bear Call Spread on top of a Bull Put Spread, collect the combined credit, and let the stock chop sideways while theta pays you.
🔁 Sideways / Range-BoundThe condor's tighter, higher-conviction cousin. Sell an ATM call and ATM put right at the money, buy OTM wings for protection. Bigger credit, but the stock needs to stay much closer to your center strike.
🔁 Sideways / Range-BoundAs pure as premium-selling gets — sell an ATM call and an ATM put, same strike, same expiry. Maximum premium collected, but maximum exposure too if the stock decides to move hard in either direction.
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