A calendar straddle (horizontal straddle) that is designed to profit as the underlying is believed to stay stagnant over a specific period of time. This strategy involves the purchase of a long-term straddle (i.e., a long straddle) and the sale of a shorter-term straddle (i.e., a short straddle). More specifically, an investor pursuing a long horizontal straddle strategy should buy a long-term at-the-money call option and a long-term at-the-money put option, and sell a short-term at-the-money call and a short-term at-the-money put, all at the same time.

In this long strategy, the strike prices are identical but expirations are different. The longer term expiration has more time but it will also cost more. The risk associated with this strategy is considerable since with two long options, the investor still has to overcome the deterioration in time value (i.e., the time decay). In contrast, the investor who has established a short horizontal straddle, can benefit from time decay and avoid exercise by closing one leg or the other immediately as the straddle value declines. Furthermore, the investor can roll one or both positions forward in order to defer exercise insofar as more credit accumulates.

The long horizontal straddle is also known as a long calendar straddle.