Snapshot
Legs
Sell 1 Short-Term Call + Buy 1 Long-Term Call (Same Strike)
Outlook
Neutral in short term, Bullish long term
Max profit
Occurs if stock closes at strike price at short-term expiration (Variable)
Max Loss
Net debit paid
A long call calendar option strategy is set up by selling a short-term call option and buying a long-term call option at the exact same strike price. You pay a net debit upfront to open the trade because options with more time until expiration carry higher prices. Traders use this strategy when they expect the stock price to remain near the strike price in the short term, with potential for a rise later on.
The maximum profit occurs if the stock price rests right at the strike price when the short-term call expires, causing it to become worthless while the long-term call retains strong time value. The maximum loss is limited to the initial net debit paid, which happens if the stock moves dramatically up or down away from the strike price.
Example
Stock
$100
Trade
- Sell 30-day $100 Call for $2.75
- Buy 90-day $100 Call for $5.00
→ $2.25 debit ($225)
Breakevens
~$96.00 / ~$104.50
Outcomes
- Stock near $100 at 30 days: ~$180 Peak Profit
- Stock at ~$96 or ~$104.50: $0 Breakeven
- Stock far from $100: Loss, up to the -$225 debit