Name: Long Calendar Spread w/ Puts
Setup: Sell (short) Strike A put (front month) and Buy (long) Strike A put at a later month (back month)
Bias: Neutral
Break-Even: Due to the fact that it is played over two different expiration months determining an exact breakeven point is difficult
Max Profit: Limited – Credit received from short put minus the time decay lost on the long put
Max Loss: Limited – Debit paid
Margin: Since the trade is paid for no margin is required
Time Decay: Time decay is your friend in this play since it will speed up the decline of the short front month option faster than the back month option
Implied Volatility: Implied volatility’s effect is mixed in this case. On one hand you want volatility to increase because it will drive up the price on the long back month option. However, you do not want the stock to move a lot as this is a neutral play.
Notes: None at this time
Featured in Trade Review: None at this time

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