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Define: Calendar Straddle



Calendar Straddle is a neutral options trading strategy that profits in the short term when the underlying stock remains stagnant and keeps the possibility of profiting when the stock breaks out in the longer run.

The Calendar Straddle consists of buying a long straddle on a far expiration month and then writing a short straddle for the near month. You would typically use a Calendar straddle if you are of the opinion that a stock would breakout in a few months but would likely remain stagnant for the near month.

Read the full tutorial on Calendar Straddle.