Calendar Spread Calculator
A calendar spread, also called a time spread, sells a near term option and buys a later option at the same strike. It makes money from time: the near option loses value faster than the later one. Use the calculator for call or put calendars.
How a calendar spread works
- Sell an option with the nearer expiry.
- Buy an option with the later expiry, same strike, same type.
- Net debit = later option − nearer option. That is your max loss.
- Best outcome: the stock sits at the strike when the short option expires. The short expires worthless and the long still holds most of its time value.
- Worst outcome: a big move either way. Both options lose time value and the spread shrinks.
The payoff is a hill centered on the strike, with two breakevens, one on each side. The calculator finds both.
Example
Stock at $100. Sell the 30 day $100 call at IV 42%, buy the 60 day $100 call at IV 38%. Net debit about $1.50, so one spread costs $150.
Value at the short expiry, with the long call's IV down 10%:
| Stock at short expiry | Spread value | ROI |
|---|---|---|
| $90 | $0.72 | −52% |
| $100 | $4.07 | +172% |
| $105 | $2.22 | +48% |
| $110 | $1.17 | −21% |
Volatility matters more than direction
Two things drive a calendar beyond the stock price:
- Term structure. You want the near option's IV higher than the later one, which is common before earnings. Each leg has its own IV field in the calculator.
- IV change. The long leg is a long volatility position. If IV falls after you enter, the spread loses value even with the stock at the strike.
A calendar is neutral when the strike is at the money. Place the strike above the current price for a mildly bullish calendar, or below with puts for a mildly bearish one. The calculator shows the direction from your strike.
Need a directional time spread? See the diagonal spread calculator.
FAQ
What is a calendar spread? An options strategy that sells a near term option and buys a later option at the same strike. It profits from faster time decay in the near option, most when the stock is near the strike at the near expiry.
Is a calendar spread bullish or bearish? Neutral at the money. With the strike above the current price it is mildly bullish; below it, mildly bearish.
What is the max loss on a calendar spread? The net debit, assuming the short option is not assigned early.
Why is a calendar spread called a time spread? Because the two legs differ only in time to expiry. The trade is a bet on how fast each one loses time value.
Other calculators
- Options profit calculator
- Black Scholes calculator
- Call option calculator
- Put option calculator
- Bull call spread calculator
- Bear put spread calculator
- Diagonal spread calculator
See all of them on the free tools page.
Educational tool only. Not investment advice. Prices are Black Scholes estimates, not live quotes. See the Disclaimer.