[Verse 1]
When you buy and sell options with different dates
Same strike price but expiration waits
Long position in the distant month ahead
Short position near-term until it's dead
This is called a calendar spread my friend
Time decay working till the short contracts end
[Chorus]
Calendar spread, time is your ally
Buy the far month, sell the nearby
Theta decay will work in your favor
When volatility stays stable as your neighbor
Calendar spread, calendar spread
Profit from time while risk is well-fed
[Verse 2]
Maximum profit comes when expiration day
Stock price sits right at the strike we play
Near-term option expires worthless and flat
Long-term option holds value where we're at
But if the stock moves too far away
Both positions lose money by the end of day
[Chorus]
Calendar spread, time is your ally
Buy the far month, sell the nearby
Theta decay will work in your favor
When volatility stays stable as your neighbor
Calendar spread, calendar spread
Profit from time while risk is well-fed
[Bridge]
Watch implied volatility's dance
High vol hurts your profit stance
Low vol helps the spread succeed
Time decay is what you need
Risk is limited to what you paid
Maximum loss when both options fade
[Verse 3]
Best when you expect sideways price action
Neutral strategy with time satisfaction
Manage the trade as expiration nears
Roll or close before volatility fears
Professional traders use this every day
Making money when the markets stay at bay
[Chorus]
Calendar spread, time is your ally
Buy the far month, sell the nearby
Theta decay will work in your favor
When volatility stays stable as your neighbor
Calendar spread, calendar spread
Profit from time while risk is well-fed
[Outro]
Different dates, same strike price
Time decay rolling like loaded dice
Calendar spreads for the CFA mind
Time-based profits that you'll always find