At-The-Money
Time Spread
...or
Call Time Spread
Position |
Type |
Strike |
Expiration |
Quantity |
Short |
Call |
ATM (0) |
Near term |
1 |
Long |
Call |
ATM (0) |
Long term |
1 |
| Example: | ||||
| Short 1 Aug 60 Call @ 3 3/8 Long 1 Oct 60 Call @ 5 1/8 |
||||
Opinion:
Neutral
A Time Spread
contains two options with the same strike price but different expiration
months. In this example, at-the-money Calls are used because of the investor’s
neutral bias. The ATM 60 Puts could also be used.