A put time spread is an options strategy that has the investor implementing a short put and a long put at the same strike price, but with different expirations.

Time spreads can also be called calendar spreads or horizontal spreads. A put time spread will use two put contracts on the same underlying security but with different expiration dates. One of the puts will be sold short, and one will be held long (this is the nature of spreads).

If a long put is used on a near-month, and a short put is used on a far month, it’s called a long put calendar spread, and its maximum gain would occur after the short put had expired and the price of the underlying falls so that the long put is in the money.

A short put calendar spread would be if the far-month option were the short one and the near-month option was the long one. Once the near-month option expires, the investor should probably buy a put to cover the short position, otherwise, the naked put could subject the investor to significant losses. The maximum gained in a short put time spread is the net premium received when the position was established.