The In the Money Calendar Put is a bullish option strategy than can be entered for a small debit.


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Strategy: Calendar Put, ITM

a.k.a. Horizontal Spread, Time Spread

Calendar Put In the Money Option Graph

The Outlook: Bullish on stock price movement, and Implied Volatility currently low or normal. The expectation is that gains will be made from the passage of time as well as a rise in the stock price.

The Trade: Sell put(s) using the next strike price above the current stock price, and a near term expiration date, and buy put(s) using the same strike price and an expiration date further out in time.

Gains when: Stock moves higher, while near term short puts lose value due to the passage of time.

Maximum Gain: Must use an options calculator or graphing software. Usually more than the initial debit.

Loses when: Stock does not rise higher than the lower breakeven point, or rises beyond the upper breakeven point, or before expiration if volatility falls too much.

Maximum Loss : Limited to the initial debit.

Breakeven Calculation: There are two breakeven points, above and below the ITM strike. An options calculator or graphing software is necessary to calculate because the breakevens depend on the volatility.

Advantages compared to stock: Increased leverage, much less capital required, "built-in" stop loss.

Disadvantages compared to stock: Greater risk of 100% loss of the capital invested, no dividends, limited life, limited maximum gains.

Volatility: after entry, increasing implied volatility is positive.

Time: after entry, the passage of time is positive IF the stock moves higher.

Margin Requirement : None. Initial debit must be paid in full.

Variations: Calendar Put, ATM; Calendar Put OTM.

Synthetic Equivalent: No true synthetic, but a Calendar Call using same strikes and expiration dates is a nearly identical position.


  • An ITM Calendar Put can be used instead of positioning bullishly with stock, ATM long calls, OTM long calls, or ATM Bull Calls.
    • Compared to stock, the strategy has much less risk and more leverage.
    • Compared to ATM long calls and ATM Bull Calls, the initial debit is less, which means the breakeven point is lower.
    • Compared to OTM long calls, much less stock movement is needed for a gain. The OTM Calendar has it's maximum gain where the OTM long call would still not be at breakeven.
    • And compared to either type of call by itself, the passage of time helps the Calendar, IF the stock rises.
    • However, the ITM Calendar Put has a "sweet spot", and if the stock rises too much the position will be hurt. This is not the case for any of the other positions.
  • The upper and lower breakeven points of a Calendar strategy are determined by the volatility of the stock. A stock with higher volatility will have a wider range of profitability. However, buying a Calendar when the stock is at historically high volatility is a bad idea. The volatility returning to normal levels can easily overcome the gains from both the stock price rising, and the passage of time.
  • Other variations of Calendar Puts can be used if you have a near term neutral or bearish opinion on a stock or ETF, and want to target a "sweet spot" at or lower than the current price. See Calendar Put, ATM for a neutral strategy, and Calendar Put, OTM for a bearish strategy.
  • Calendar Puts and Calendar Calls have nearly identical profit graphs. There may be some advantage to using one or the other based on the initial debit available in the market, or your long-term bullish or bearish outlook on the stock itself.
  • Since you are positioning bullishly for a debit entry, you may want to check the cost of simply buying a long call. The long call has the advantage if the stock should rise higher than you expect.


  • Since this is a bullish position, the trader is expecting the stock to rise. If the stock does not rise, it is usually wise to exit the trade, taking less than the maximum possible loss. Using the graph at the top of the page, you might exit if the stock dropped to about 48 within two weeks, and your loss would be about half the maximum possible.
  • Many Calendar strategy traders with a gain try to be out of the trade with a week left to expiration. See the Delta Neutral Trading page for reasons why.
  • Over the long term, successful Calendar traders try to beat the market by having many small gains, and fewer small losses. They do not usually take the maximum loss nor try to squeeze every penny out of the winners.


  • If the stock stays near or moves near one of the breakeven points, it is possible to adjust a Calendar Put into a "Double Calendar" by buying another Calendar Put at a higher or lower strike price, whichever way the stock is moving. This will give a higher overall breakeven point if the stock is moving up, or lower if the stock is moving down. However, this is not a guaranteed fix: the stock could whipsaw.

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