Calendar Call option strategy
Calendar Call 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 22,650 · 6 Oct 2026Legs
| Action | Option | Expiry | Strike | Lots | Qty | Premium |
|---|---|---|---|---|---|---|
| SELL | ATM Call | 6 Oct | 22,650 | 1 | 65 | ₹135.47 |
| BUY | ATM Call | 13 Oct | 22,650 | 1 | 65 | ₹200.91 |
How it works
- Sell 1 ATM call at the 22,650 strike for ₹135.47 in the near expiry, collecting the premium.
- Buy 1 ATM call at the 22,650 strike for ₹200.91 in the next expiry, paying the premium.
- You pay a net ₹4,254 upfront for the position. This is the most you can lose.
Below 22,438 you lose, up to ₹4,254.
Between 22,438 and 22,866 you profit, up to ₹5,387.
Above 22,866 you lose, up to ₹4,254.
Set-up: If view is neutral then one can select ATM option while if one is bullish then we can select OTM option. Sell near expiry call and buy next expiry call at same strike.
What happens if Nifty moves
Profit or loss at the near expiry| Nifty at expiry | Move | Profit / loss |
|---|---|---|
| 21,300 | −6% | −₹4,253 |
| 21,950 | −3% | −₹3,998 |
| 22,400 | −1% | −₹675 |
| 22,650 | Unchanged | +₹5,393 |
| 22,900 | +1% | −₹590 |
| 23,350 | +3% | −₹3,947 |
| 24,000 | +6% | −₹4,252 |
How the Greeks affect it
When to use
Calendar Call needs to be executed when you expect stock to 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.
Things to watch
- Capped upside if the stock rises.
- Can lose on the upside if the stock rises significantly.
- High yield does not necessarily mean a profitable or high probability profitable trade.
Calendar Call: questions
What is a Calendar Call strategy?
Calendar Call 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 Call?
Calendar Call needs to be executed when you expect stock to 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 Call?
If view is neutral then one can select ATM option while if one is bullish then we can select OTM option. Sell near expiry call and buy next expiry call at same strike.
What is the maximum profit of a Calendar Call?
Maximum reward is limited to the residual call 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 Call?
Maximum risk on the trade itself is limited to the net debit of the bought calls minus the sold calls.
What is the breakeven of a Calendar Call?
With Nifty at 22,650, the example on this page breaks even at 22,438 and 22,866 at expiry.