Recently, I saw some traders in the options market playing a reverse calendar spread strategy. The idea is actually quite simple—after Bitcoin surges, they choose to buy near-term ETH call options while selling longer-term call options at the same strike price. This way, a single order of 1600 contracts can collect premiums exceeding 50 ETH, which is quite substantial.

His judgment is that ETH is unlikely to continue skyrocketing in the short term, and he expects it to stay below 3800 before the end of March. Based on this logic, if ETH ultimately cannot hold above 3500, theoretically, he can pocket all the premiums collected. The obvious problem is—after the near-term options expire, if ETH continues to surge, the naked short call options will become a bottomless pit, and losses could be infinitely magnified. This is the core risk of the reverse calendar spread.