Calendar Spread Cost Calculator
Cost a calendar (time) spread — sell the near-term option, buy the longer-dated one at the same strike — and see the net debit, total outlay and max risk.
How it works
Net debit = long (far) premium − short (near) premium · Cost per spread = net debit × 100 · Max loss ≈ net debit paid
A calendar spread sells a near-dated option and buys a longer-dated option at the same strike, paying a net debit. It profits from the faster time decay of the short leg — theta works for you — and from a rise in implied volatility on the long leg. The most you can lose is the debit paid, which happens if the underlying moves far from the strike and both legs lose their extra time value.
Worked example
Buy a three-month $100 call for $5 and sell a one-month $100 call for $2. The net debit is $3 per share, or $300 per one-contract spread. That $300 is the maximum loss; the position profits most if the stock sits near $100 as the near leg expires.
Frequently asked questions
Why is a calendar spread a debit?
The longer-dated option always carries more time value than the near-dated one at the same strike, so buying the far leg costs more than you collect selling the near leg. The difference is your net debit.
What is the ideal outcome?
The underlying finishing right at the strike as the near leg expires worthless, letting you keep a long option that still has time value. Big moves in either direction erode the spread.
How does volatility affect it?
A calendar spread is long vega on balance, so rising implied volatility helps and falling volatility hurts. That makes entry into a low-volatility environment more attractive.
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Educational estimate using a simplified Black–Scholes / options model — no dividends, no early-exercise, no fees or slippage. Options are high-risk. Not investment advice.