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2.9. Calendar Call

ProficiencyDirectionVolatilityAsset LegsMax RiskMax RewardStrategy Type
N/A+
IntermediateBullish • Long CallCappedCappedIncome
   • Short Call   


2.9.1. Description

Calendar spreasds are known as horizontal spreads, and the Calendar Call is a variation of a Covered Call, where you substitute the long stock with a long-term long call option instead. This has the effect of radically reducing the investment, thereby increasing the initial yield. However, this initial yield is not necessarily reflective of the maximum yield at the expiration of the short-term short call. The maximum yield will depend on both the stock price and the residual value of the long unexpired call.


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