Long Calendar Spread

This is a neutral strategy used when you expect the stock price to stay relatively flat (low volatility) in the short term.
​The Setup
​You construct a long calendar spread by:
​Selling a short-term option (e.g., one that expires in 30 days).
​Buying a longer-term option (e.g., one that expires in 90 days).
​Both options will have the same strike price (typically at-the-money or slightly out-of-the-money) and be the same type (either both calls or both puts). Because the longer-dated option costs more, this is a "debit" spread, meaning you pay to enter the trade.
​The Goal & How it Profits
​The goal is to profit from accelerated time decay (Theta).
​Options lose value faster as they get closer to their expiration date. The short-term option you sold will decay in value much more rapidly than the long-term option you bought.
​Ideally, the stock price hovers around your chosen strike price. Your short-term option expires worthless (a 100% profit for you), and you are left holding the long-term option, which still has plenty of time value left. You can then sell this remaining long option to close the position for a profit.
​Maximum Loss: Limited to the net debit (the cost) you paid to put on the spread.
​Maximum Profit: Achieved if the stock price is exactly at your strike price when the short option expires.