What is a Double Calendar?
Sell a near-term put and buy a longer-term put at the same strike.
Sell a near-term call and buy a longer-term call at the same strike.
Core structure
Assume the stock trades near $100.
| Leg | Action | Strike | Expiration |
|---|---|---|---|
| 1 | Sell Put | $95 | 30 days |
| 2 | Buy Put | $95 | 90 days |
| 3 | Sell Call | $105 | 30 days |
| 4 | Buy Call | $105 | 90 days |
Worked example
| Leg | Illustrative Premium |
|---|---|
| Sell 30-day $95 Put | +$2.00 |
| Buy 90-day $95 Put | -$4.00 |
| Sell 30-day $105 Call | +$2.20 |
| Buy 90-day $105 Call | -$4.20 |
Ideal outcome
The strategy often performs best when the stock remains between the two calendar strikes as the near-term expiration approaches.
The exact value depends on the remaining time value and implied volatility of the longer-dated options.
Why time decay can help
The short 30-day options generally decay faster than the 90-day options.
Why max profit is not fixed in advance
A Double Calendar does not have a simple fixed maximum profit like a vertical spread.
Maximum loss
If the trade is entered for a debit and all legs ultimately expire worthless, the debit is the broad theoretical loss ceiling in a basic fully paid setup.
Volatility considerations
Can help the longer-dated options gain or retain value.
Can help the short options lose value faster.
Calendar structures are generally more sensitive to implied volatility than simple vertical spreads.
Double Calendar vs. Double Diagonal
| Feature | Double Calendar | Double Diagonal |
|---|---|---|
| Short vs. long strikes | Same | Different |
| Expirations | Different | Different |
| Range shape | More centered | More customizable |
| Directional tuning | Less flexible | More flexible |
Double Calendar vs. Iron Condor
| Feature | Double Calendar | Iron Condor |
|---|---|---|
| Expirations | Different | Same |
| Typical entry | Debit | Credit |
| Max profit | Dynamic | Known at entry |
| Volatility sensitivity | Higher | Usually lower |
| Management | More active | Usually simpler |
What happens at the first expiration?
- Close the entire position.
- Buy back the short options and keep the longer-dated options.
- Sell another set of near-term options at the same or new strikes.
- Roll one side if the stock has moved toward one edge of the range.
Assignment risk
The short near-term options can be assigned before expiration if they become in the money.
Risk if the stock moves too far
A sharp move far below the put strike or above the call strike can hurt the position because the trade was designed for a range.
Pros and cons
- Range-oriented strategy.
- Can benefit from near-term time decay.
- Long-dated options retain time value.
- Can be reused or rolled.
- No uncovered short-option tail risk when properly paired.
- Profit is harder to calculate.
- High sensitivity to implied volatility.
- Requires active management.
- Assignment risk on short legs.
- More complex than an Iron Condor.
How to close it
Closing all four legs together helps preserve the intended risk profile.
Common mistakes
- Assuming the trade has a fixed max profit like an Iron Condor.
- Ignoring implied-volatility changes.
- Using illiquid longer-dated options.
- Holding short legs into expiration without an assignment plan.
- Choosing strikes too narrow for the expected stock movement.
Beginner checklist
| Check | Question |
|---|---|
| ☐ Range thesis | What range do I expect into the first expiration? |
| ☐ Strikes | Why did I choose these two target strikes? |
| ☐ Expirations | How much farther out are my long options? |
| ☐ Volatility | How do near-term and longer-term IV compare? |
| ☐ Assignment | Can I handle assignment on either short leg? |
| ☐ Management | Will I close, roll, or resell short options? |
| ☐ Alternative | Would a Double Diagonal or Iron Condor better fit my outlook? |
Key takeaway
It is a range-bound, time-decay and volatility strategy using the same strikes across two different expirations.
The trade-off is: more flexibility and long-option time value in exchange for more complex pricing and active management.