Add training workflow, datasets, and runbook
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Calendar Spreads
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Definition : A calendar spread, sometimes called a time spread or a
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horizontal spread , is an option strategy that involves buying one option and
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selling another option with the same strike price but with a different
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expiration date.
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At-expiration diagrams do a calendar-spread trader little good. Why? At
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the expiration of the short-dated option, the trader is left with another option
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that may have time value. To estimate what the position will be worth when
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the short-term option expires, the value of the long-term option must be
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analyzed using the greeks. This is true of the variants of the calendar—
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double calendars, diagonals, and double diagonals—as well. This chapter
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will show how to analyze strategies that involve options with different
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expirations and discuss how and when to use them.
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