In finance, a calendar spread is a name that is given to a futures/option spread trade that is involved in the purchase of futures/options of an underlying market expiring in some named month, and simultaneously it is also involved in the sale of other futures/options of the same underlying market and the same striking price (that is applicable in case of options as futures do not have any strike price) in a different month.
The usual calendar spread, that is also referred to as a time spread or horizontal spread, involves the purchase of futures/options of a named strike price expiring in a more distant month and the sale of futures/options that has the same strike price that expire in a more nearby month.
