Learn how different expirations create a calendar spread's distinctive theta, vega and gamma profile.
Two different clocks
A long calendar sells a near-term option and buys a longer-term option at the same strike. The front leg usually decays faster, while the back leg commonly carries greater vega.
Price location
The favorable theta profile is often concentrated near the strike. A large move away can reduce the value of the remaining time-spread relationship and change net delta and gamma.
Volatility term structure
The two expirations do not necessarily experience the same IV change. Earnings and other events can concentrate volatility in one maturity, so a parallel-vega estimate may miss the main risk.
A practical example
A calendar appears positive vega because the back month has more vega. If front-month event IV rises while the back month barely moves, the actual result can differ from a parallel-shift estimate.
This simplified example isolates selected sensitivities so their interaction is easier to understand. Live option prices also reflect the underlying price, time decay, rates, dividends, liquidity and transaction costs. Greeks are theoretical estimates, not guarantees.
Frequently asked questions
Are calendars always positive theta?
Not everywhere; price relative to the strike and time can change the sign.
Why is vega usually positive?
The longer-dated purchased leg often has greater vega than the near-term short leg.
What happens at front expiration?
Exercise, assignment and the remaining back option must be managed deliberately.
Continue the All Greeks in Action cluster
Explore related guides: Option Greeks Around Earnings · Option Greeks: 12 Mistakes to Avoid · Option Greeks for a Long Put. For a structured sequence, use the free Level 8 – All Greeks in Action course.
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Options involve risk and are not suitable for every investor. This material is educational and is not investment, tax or legal advice. Greeks are theoretical estimates, and contract terms and broker requirements can vary.