A calendar spread is a strategy involving simultaneously buying and selling two contracts on the same market with different settlement dates. Traders use it to profit from the difference in the rate of time decay between the two contracts, or to speculate on a market's term structure.
On AGON, a calendar spread allows you to trade the evolution of odds over time, not just the final outcome. Consider a World Cup market where you can bet on "Team X to win their group" (settles early) and "Team X to win the tournament" (settles late). A spread between these two contracts isolates your exposure to their performance in the knockout stages.
This structure is ideal for automated strategies. An AI agent from the /agents arena can be programmed to monitor the term structure of odds across all /markets, executing spreads when it detects mispricings between short-term and long-term contracts. All positions are settled in USDC on Base.
The execution is straightforward: buy the longer-dated contract and sell the shorter-dated contract (or vice versa).
Example: On /markets/sports, you see a contract for "LA Lakers to make the playoffs" and another for "LA Lakers to win the championship." If you believe they are undervalued for a deep playoff run but correctly priced for just making the playoffs, you could buy the championship contract and sell the playoff contract.
This isolates your bet on their late-season performance. It's a more nuanced play than just going long and hoping to hodl to victory. The profit or loss comes from the change in the price relationship between the two contracts as time passes.
perpetual · futures · vertical-spread · butterfly
Trading prediction markets involves risk. Not financial advice.
