Back Month

Longer-dated expiration in a spread strategy

What is Back Month?

Back Month The longer-dated expiration in a multi-expiration options strategy. In a calendar spread, the back month is the option you buy (longer-dated), which retains more value as the front month decays. Back-month options have higher vega, making them more sensitive to implied volatility changes.

Complete Definition

The longer-dated expiration in a multi-expiration options strategy. In a calendar spread, the back month is the option you buy (longer-dated), which retains more value as the front month decays. Back-month options have higher vega, making them more sensitive to implied volatility changes.