Core Strategies: Time Spreads (Calendar Spreads)

Another strategic category that we use from time-to-time at tastytrade is the Time Spread category. Inside of this category, arguably the most classic strategy is the <a href="https://www.tastytrade.com/definitions/calendar-spread" target="_blank">Calendar Spread</a>. With the same stock and same strike, but different expiration cycles, the Calendar Spread allows us to isolate the theta differential between the front month and back month. As Kai shows us in this segment of the Core Strategies Series, this allows us to set up a very <a href="https://ontt.tv/2DbQ2Ye" target="_blank">low risk, low return</a> trade opportunity to take advantage of expanding volatility.