Calendar Spread Trading Strategy Futures

Nifty futures calendar spread strategy css.

Calendar spread trading strategy futures. A calendar spread is a trading strategy for futures and options to minimize risk and cost by buying two contracts or options with the same strike price and different delivery dates. Futures chart not posted as tradingview does not have nifty futures chart. A calendar spread is a low risk directionally neutral options strategy that profits from the passage of time and or an increase in implied volatility.

Futures calendar spreads also known as futures time spreads futures horizontal spreads intermonth spread or interexpiration spread are a class of futures strategies that utilizes futures contracts of different expiration months in order to produce a bullish or bearish futures position which is less volatile than an outright long or short. A calendar spread is a trading strategy in that the trader buys and sells two contracts with different expiration dates of the same financial instrument at the same time. How futures traders use calendar spreads.

Css is a strategy with an objective of profiting from spreads between far month futures and near month futures. The usual case involves the purchase of futures or options expiring in a more distant month the far leg and the sale of futures or options in a mo. While futures calendar spreads are relatively low risk products they are not immune to losses.

Hence please view futures chart in other softwares to have an understanding of the concept concept. Payoff in the spread doesn t come from price movement but rather the slope of the forward curve. Futures calendar spreads are first and foremost a hedging product used to reduce the market s inherent risk.

Trading futures by way of executing a calendar. Calendar spread involves options of the same underlying asset the same strike price but with different expiration dates. Calendar spreads may be executed in a bullish or bearish fashion depending on the position taken in the near month contract.

For eg as on 09 02 2018 the following are the nifty levels. Calendar spreads also called intramarket spreads are types of trades in which a trader simultaneously buys and sells the same futures contract in different expiration months. Nifty spot level is 10540 nifty feb futures.