Calendar spreads are best known as strategies that exploit the time decay of options, but like all options positions, they are also affected by moves in the underlying market and implied volatility (IV) changes.

Making money with calendar spreads requires an understanding of how each of these three factors influences the position’s value. Calendar spreads are flexible, which means you can make money even in a very short time period, assuming you can profit from either changes in the underlying’s price or implied volatility.