Horizontal/Time Spreads

Just want to work this in my mind. I get questions where the expiration for one March and Feb on the expirations. How & why would March be a longer expiration rather than Feb being the longer of the expirations? Just trying to get some clarity on this.


I hope this question gets more traction. Because I’ve been getting stuck on these questions too. :smiling_face_with_tear:

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Same here. I get the concept of it but I dont get the concept of it. :melting_face:

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Hi, don’t overthink it! If it’s currently January, there’s one month until February, and two months until March. Therefore, March is the longer expiration.

Sometimes people get confused when the months wrap around due to a new year, like with January and December.

Options (with the exception of LEAPS) have a maximum 9-month expiration, giving us a clue to the timeline.

For example, it would not be possible to do a spread with Jan 2030 and Dec 2030, since that would mean it is currently Q4 2029 or earlier, and the Dec 2030 options would have an impossible 10+ mo expiration. So, the expirations must be something like Dec 2029 and Jan 3030, and we’re probably in Q3 or Q4 2029.

Sketching out a timeline with calendar months and the expirations can help you visualize this!