Real Example (July 2025)
A long call calendar spread involves buying a longer-term call and selling a shorter-term call at the same strike. It's best used when expecting sideways movement in the near term and a larger move later.
- Stock: XYZ Corp
- Outlook: Neutral short-term, bullish long-term
- Setup: Buy 1 XYZ $100 Call (Oct) @ $5.50; Sell 1 XYZ $100 Call (Aug) @ $2.50
- Net Debit: $3.00 ($300 per contract)
- Max Loss: $300
- Max Gain: Varies based on implied volatility and timing
- Ideal Stock Price at Aug Expiration: Around $100