What are Time Spreads?
Time spreads are essentially a strategy for maximizing profits from the buying and selling of securities. The method involves selling an option that is near the end of its term, while purchasing an option that is of the same type that will not come to term until well into the future. This process allows the investor to continue enjoying the profits made from the options in question for as long as the investor chooses. While time spreads are great ways to keep making profits from various options, time spreads should not be thought of as a sure thing all the time. As with any type of investment strategy, there are always risks involved with the use of time spreads. One of the key components to look at when considering the use of time spreads to expand a portfolio is the volatility of the option. The fact is that every option contains the potential to move suddenly in any direction. When considering options for time spreads, it is a good idea to avoid any options that seem to be prone to
