An option or futures spread trade that is established by simultaneously buying and selling options or futures that have different expiration or delivery dates. For example, an investor may go long on a 3 month option and short on a 6 month option, or he may go long on a 2-month oil futures and short on a 6-month futures.

For a calendar spread to meet margin requirements, the contracts purchased should have a time to expiration longer than that of the contracts sold. However, the number of contracts purchased ought to be equal to that of the ones sold, with both options/futures having the same strike price/futures price. For instance, an investor can establish a calendar spread using options by buying a December 100 call and selling a September 100 call. This calendar could be labeled for a shortcut “a Sep-Dec 100 call calendar spread”. This strategy is the most profitable should the spot price of the underlying be the nearest to the strike price on the expiration date of the contracts sold.

The calendar spread is also known as a horizontal spread, a time spread, and an interdelivery spread.