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Bull Calendar Spread Option Strategy-Bullish Strategy

Bull-Calendar-Spread-Option-Strategy

Bull Calendar Spread Option Strategy

When a trader is bullish on the underlying stock/index in the near run, say 2-3 months, this strategy is used. A trader will write one Near Month out-of-the-money (OTM) Call Option and buy one Next Month out-of-the-money (OTM) Call Option, lowering the cost of going long pn the same underlying asset with the different call strike.

The investor/trader employing this strategy is long-term optimistic and is selling near-month calls in order to trade the next / far month call option for free.

When a trader wishes to benefit from a steady rise in the stock price over a short period of time, this strategy is used.

Bull-Calendar-Spread-Option-Strategy

Risk:

Limited

Reward:

Unlimited

Construction

Sell 1 Near-Month OTM Call Option

Buy 1 Mid-Month OTM Call Option

Option Type Expiry Date Strike Price LTP Action No. Of Lots
CALL 29/03/2023 17000.0 226.65 Sell 1
CALL 27/04/2023 17550.0 147.75 Buy 1

Also read: Protective Put Option Strategy

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