OptionMath.com

• Calendar Spread
  A calendar spread involves buying one option and then selling another option of the same type (put or call) and the same strike price but with a different expiration date. A long calendar spread is long the longer-dated option and is short the shorter-dated option. The risk is limited to the net amount of premium paid and the potential profit is theoretically unlimited. A short calendar spread is short the longer-dated option and is long the shorter dated option. The maximum potential profit is the premium received and the maximum risk is theoretically unlimited if the shorter-dated option expires and nother is done to cover the remaining short option position. See the OptionMath.com Calendar Spread Cheat Sheet