If you are long an at the money calendar spread your position would be measured at which of the following greeks?a. Long vega, short γ, positive θ Mb. Short vega, short γ, positive θ Mc. Long vega, long γ, positive θ Md. Long vega, short γ, negative θ M

Calendar spreads involve buying and selling options with identical strike prices but different expiration dates, in order to profit from time decay. When longing calendar spreads, this usually entails being exposed to higher volatility than usual while being relatively exposed to changes in asset price changes as well as being long vega, short gamma, and positive theta (profiting from time passing by) when longing them..
 

Supplemental Knowledge:

When dealing with options trading, understanding the Greeks is crucial as they measure different risks associated with options positions. Here are the key Greeks relevant to your question:

1. Vega (ν):
- Vega measures the sensitivity of an option's price to changes in the volatility of the underlying asset.
- A long calendar spread typically benefits from an increase in volatility, hence it has positive vega.

2. Gamma (γ):
- Gamma measures the rate of change of delta with respect to changes in the underlying asset's price.
- Calendar spreads generally have low gamma because they involve positions that are less sensitive to small movements in the underlying price.

3. Theta (θ):
- Theta measures the sensitivity of an option’s price to the passage of time, also known as time decay.
- A long calendar spread usually has positive theta, meaning it benefits from time decay when near expiration.

From Concepts to Reality:

Imagine yourself as a trader anticipating increased market volatility but limited stock price changes over a specific time. A long calendar spread provides you with an excellent way to capitalize on this scenario due to its positive vega and positive theta characteristics, providing your potential profits with positive vega and theta characteristics.

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