FF calculation Saptarshi Chatterjee

Forward factor (in options contexts) measures implied volatility (IV) for a future period between two expirations, like from 30 DTE (days to expiry) front-month to 60 DTE back-month options.

This indicator calculates the FORWARD FACTOR(FF) using 2 IVs of 2 DTEs.

+ve value means front DTE is rich in premium and back expiry is cheap.
-ve value means front DTE IV is cheap and 2nd DTE is expensive

we can use this term structure disbalance to trade calendar spreads with edge.