Calendar Put option strategy
Calendar Put is also known as Horizontal Spread. It is a neutral to bullish strategy wherein you buy long term option and sell near term option of same strike but different expiry.
Payoff at the near expiry
Nifty, lot size 65 · Nifty future 23,104 · 19 Oct 2026Legs
| Action | Option | Expiry | Strike | Lots | Qty | Premium |
|---|---|---|---|---|---|---|
| SELL | ATM Put | 19 Oct | 23,100 | 1 | 65 | ₹53.97 |
| BUY | ATM Put | 27 Oct | 23,100 | 1 | 65 | ₹156.30 |
How it works
- Sell 1 ATM put at the 23,100 strike for ₹53.97 in the near expiry, collecting the premium.
- Buy 1 ATM put at the 23,100 strike for ₹156.30 in the next expiry, paying the premium.
- You pay a net ₹6,651 upfront for the position. This is the most you can lose.
Below 22,998 you lose, up to ₹6,651.
Between 22,998 and 23,203 you profit, up to ₹2,936.
Above 23,203 you lose, up to ₹6,651.
Set-up: If view is neutral then one can select ATM option while if one is bullish then we can select ITM option. Sell near expiry put and buy next expiry put at same strike.
What happens if Nifty moves
Profit or loss at the near expiry| Nifty at expiry | Move | Profit / loss |
|---|---|---|
| 21,700 | −6% | −₹6,651 |
| 22,400 | −3% | −₹6,401 |
| 22,850 | −1% | −₹3,098 |
| 23,100 | Unchanged | +₹2,962 |
| 23,350 | +1% | −₹3,015 |
| 23,800 | +3% | −₹6,352 |
| 24,500 | +6% | −₹6,651 |
How the Greeks affect it
When to use
Calendar Put needs to be executed when you expect stock to remain range bound or rise steadily and not too far too fast. The objective is to generate income against long term option by selling near term option and gaining premium.
- Generate monthly income.
- Can profit from range bound stocks and make a higher yield than with a Covered Call or Naked Put.
Things to watch
- Capped upside if the stock rises.
- Can lose more than initial outflow on the downside also can lose on upside if the stock rises significantly.
- High yield does not necessarily mean a profitable or high probability profitable trade.
Calendar Put: questions
What is a Calendar Put strategy?
Calendar Put is also known as Horizontal Spread. It is a neutral to bullish strategy wherein you buy long term option and sell near term option of same strike but different expiry.
When should you use a Calendar Put?
Calendar Put needs to be executed when you expect stock to remain range bound or rise steadily and not too far too fast. The objective is to generate income against long term option by selling near term option and gaining premium.
How do you set up a Calendar Put?
If view is neutral then one can select ATM option while if one is bullish then we can select ITM option. Sell near expiry put and buy next expiry put at same strike.
What is the maximum profit of a Calendar Put?
Maximum reward is limited to the residual Put value when the stock is at the strike price at the first expiration, less the net debit.
What is the maximum loss of a Calendar Put?
Maximum risk on the trade itself is limited to the net debit of the bought Put minus the sold Put.
What is the breakeven of a Calendar Put?
With Nifty at 23,104, the example on this page breaks even at 22,998 and 23,203 at expiry.