In derivatives trading, the term diagonal spread is applied to an options spread position that shares features of both a calendar spread and a vertical spread. It is established by simultaneously buying and selling equal amount of option contracts of the same type (call options or put options) but with different strike prices and expiration dates.
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Trading Diagonals for Weekly Income
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Option Spread Differences | Options Trading Concepts
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Rolling & Closing Options Trades | Diagonal Spreads & Smart Man's Covered Calls
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Example
External links
- http://www.thestreet.com/story/10080609/1/real-world-trading-the-diagonal-spread.html
- Short Diagonal Call/Put Credit Spreads Archived 2020-01-21 at the Wayback Machine