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Business Definition for: calendar spread
calendar spread

options strategy that entails buying two options on the same security with different maturities. If the exercise price is the same (a June 50 call and a September 50 call) it is a horizontal spread . If the exercise prices are different (a June 50 call and a September 45 call), it is a diagonal spread . Investors gain or lose as the difference in price narrows or widens.

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