Horizontal Spread or Calendar Spread
A shockingly named calendar spread, simply spreads the options expiration date on two trades of the same security and the same strike price. Think through what happens given various scenarios. Lather, rinse, repeat is the best way to develop a feel for how options work. We can talk about theory all day, but losing money is a great way to teach lessons, albeit an expensive one.
We talked about bull and bear spreads back around a hundred or so pages ago....
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