HomeNewsOpinionIn The Money: Use the Calendar Spread, when volatility is expected to increase

In The Money: Use the Calendar Spread, when volatility is expected to increase

Ananya Roy • October 23, 2023 / 11:03 IST

Even if the underlying does make a large move, the maximum loss you can incur is the net premium outgo at deployment. In other words, losses are capped

The option we need to buy is expected to be costlier than the option we are going to sell, thereby making the Calendar Spread a net debit strategy.

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