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 long...