A calendar spread that involves buying far-month call options and simultaneously selling an equal amount of near-month at-the-money (or slightly out-of-the-money) calls on the same underlying and at the same strike price. This strategy is usually followed by investors/ traders who are neutral about the underlying in the short term and seek to profit from a possible acceleration in the time decay of the far-month options. Therefore, the maximum profit from a neutral calendar spread would be confined to the premiums (premia) received from the short options after accounting for time decay in the long options. This favorable scenario can take place in case the underlying price remains stagnant at expiration date of the near-month options.

If the price turns out to edge lower and stays in its new territory until expiration date of the far-month options, the neutral calendar spread would incur a loss limited to the initial cost of establishing the spread.