You own the stock
Buy a put, strike price A
Generally, the stock price will be above strike A
You’re bullish but nervous.
Purchasing a protective put gives you the right to sell stock …
Sell a call, strike price A (near-term expiration - “front-month”)
Buy a call, strike price A (with expiration one month later - “back-month”)
Generally, the stock will be at or around strike A
You’re anticipating minimal movement on the stock within a specific time frame
When running a calendar spread with calls, you’re selling and buying a call …
Buy a call, strike price A
Sell three calls, strike price C
Buy two calls, strike price D
Generally, the stock will be at or around strike A
You’re slightly bullish. You want the stock to rise to strike C and then stop
You can think of this strategy as simultaneously buying one long call spread with strikes A and C …