What is a calendar call?

A Calendar Call represents a view of forward volatility (or the volatility between two expiration dates). Thus, by trading a calendar, you are making a direct view of the term structure of the options chain. In the case of a long calendar, you express the belief that forward volatility is low compared to what you expect.

What is a calendar call spread?

The calendar call spread is a neutral options trading strategy, which means you can use it to generate a profit when the price of a security doesn't move, or only moves a little. It involves two transactions: buying calls and writing calls with the same underlying security and establishing it incurs an upfront cost.

Should you trade a put calendar or a call calendar?

There are inherent advantages to trading a put calendar over a call calendar, but both are readily acceptable trades. Whether a trader uses calls or puts depends on the sentiment of the underlying investment vehicle. If a trader is bullish, they would buy a calendar call spread. If a trader is bearish, they would buy a calendar put spread.

Should you buy a calendar spread?

If a trader is bullish, they would buy a calendar call spread. If a trader is bearish, they would buy a calendar put spread. A long calendar spread is a good strategy to use when you expect the price to be near the strike price at the expiry of the front-month option.