Calendar Spread
Futures
How It Works
Different expiry contracts for the same underlying have price spreads (calendar spreads). Go long near-month + short far-month, or vice versa, to capture spread changes. When near-month contracts become volatile near expiry, calendar spread strategies can exploit term structure mispricing. In crypto, weekly/bi-weekly/quarterly contracts may present arbitrage gaps.
Suitable Platforms
Suitable exchanges: Binance, OKX (multi-expiry contracts). Requires understanding of term structure (contango/backwardation), suitable for medium-frequency trading.
Risk Level
Risk: Low-Medium. Same asset different expiries = lower risk than directional. But near-month contracts get volatile near expiry, spreads can deviate sharply short-term.
Common Pitfalls
- ⚠Uneven liquidity: far-month contracts may have poor liquidity, high slippage
- ⚠Settlement mechanics: different exchanges settle differently (cash/physical), know the rules
- ⚠Asymmetric theta decay: two legs decay at different speeds, affecting holding returns
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