A calendar spread, also known as a time spread or horizontal spread, is a type of options strategy that involves buying an option with a longer expiration date and selling an option with a shorter expiration date on the same underlying asset. This strategy is designed to profit from a discrepancy in the implied volatility of the options, as well as any difference in the time decay between the two options. Calendar spreads can be constructed using call options, put options, or a combination of both. They can be employed in various market conditions and can be used to hedge against potential price movements in the underlying asset. It's important to carefully consider the risks and rewards of calendar spreads, as they can be affected by a number of factors, such as changes in the underlying asset's price and volatility.

A calendar spread, also known as a time spread or horizontal spread, is an options trading strategy where an investor simultaneously buys and sells options of the same type (either calls or puts) with the same strike price but different expiration dates. The goal of a calendar spread is to profit from the difference in time decay between the short-term and long-term options.

In a calendar spread, the trader expects the near-term option to decay faster than the longer-term option. If the underlying asset's price remains relatively stable, the trader can benefit from the decline in the value of the shorter-term option while holding the longer-term option, which retains its value for a more extended period. This strategy is particularly useful in low-volatility environments and aims to capitalize on time decay while minimizing the impact of changes in the underlying asset's price.