| Position Composition | Risk Profile @ Expiration |
Shown here, both contracts are ATM. They could both be OTM or ITM.
 | Long 1 front-month call,
Short 1 back-month call
Both contracts have the same underlying and same strike price, but different expirations.
Time value of long front-month call decays faster than time value of back-month call. |  | Max Loss: Depends on the value of the back-month call when the front-month call expires.
Max Gain: Total credit received for the spread, which is the credit from the short back-month call less the debit for the long front-month call.
E.g., $2.50 - $1.50 = $1.00 |
| Greeks-at-a-Glance | P&L caused by movement in stock price
| Movement away from strike generates profits; toward strike generates losses. | P&L corresponding to changes in implied volatility
| Short Calendar spreads benefit from falling IV. Rising IV is a detriment. | Time Decay
C:RR ratio is explained in "Decision Making" | Negative C:RR unless time value of long leg is too minimal (due to being deep ITM, OTM or near expiry.) | |
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