Volatility & advanced strategies
What is the exit criteria for a calendar spread if the trade achieves maximum profitability ahead of schedule?
By Easy Money Scanner · Educational reference · Not investment advice
The short answer
Many traders set a target such as capturing 25-50% of the calendar's estimated maximum theoretical profit and close early, since realizing the absolute maximum typically requires pinning the underlying exactly at the strike.
How it works
Closing early locks in gains and removes continued gamma and gap risk from holding through the final days before front-month expiration, when sensitivity to price moves increases sharply.
An example
If a calendar's modeled max profit is $300 and the position reaches $150 (50%) of that value early, a trader may choose to close rather than risk giving back gains.
Risk & limitations
Profit targets are heuristics based on historical experience, not fixed rules; early closure can also mean forgoing further gains if the underlying remains favorably positioned.
Examples are hypothetical, not trade recommendations. US contract and regulatory references do not automatically apply in Canada. Rules, margin requirements and broker policies can change; confirm them with the relevant authority and your broker.