Strategy Overview
Medium RiskExpertNeutral
A double calendar spread sets up two calendar spreads at different strikes - one put calendar and one call calendar. This creates a neutral position that profits from time decay at two price levels.
Max Profit
Variable - depends on IV and time
Max Loss
Net debit paid
Breakeven
Varies with strikes and IV changes
Probability
~45% win rate
hist. est.
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Example Setup Calculator
$
Debit Paid
$200
Max Profit
$300
Max Loss
$200
Breakeven
$102.00
Strategy Components
SELL OTM PUT
Sell near-term OTM put
BUY OTM PUT
Buy longer-term OTM put
SELL OTM CALL
Sell near-term OTM call
BUY OTM CALL
Buy longer-term OTM call
When to Use
- You expect the stock to stay in a range short-term
- You want two profit zones instead of one
- You want to profit from time decay and IV expansion
- You want neutral exposure with defined risk
Best Market Conditions
- Range-bound market
- Expected IV expansion
- Two clear price levels identified
Best Practices
- Front month 30 DTE or less, back month 60+ DTE
- Place strikes at expected support and resistance
- Close before front month expiration
- Benefits from IV increase in back month
Ready to Trade?
Review Double Calendar and practice it in paper trading with the school workflow.
Paper Trading