|Margin||Spread x # of contracts|
|Entry Rules||Buy 1 OTM Call Far-term, Sell 1 OTM Call|
|Reference:CBOE Exchange Double Calendar vs Double Diagonal Strategy Double Calendar Trade Example How to adjust a double calendar spread|
The Double Calendar strategy is a two calendar spread strategy( call and put spread) with each one located above and below the underlying stock price. An individual calendar spread is made up of a front month sell option and back month buy option at the same strike price level. In theory, the front month option decays at a faster rate, the difference is a net amount profit an investor can recieve during an option cycle. On entry the trader needs to pay special attention to volatility between each calendar option pair at each strike price level. The highest potential of profit can occur near the centerpoint and endpoint between the double calendar spreads.