To The Moon

Multi-leg Option Strategy: Diagonal Spread (Diagonal Puts) Diagonal Spread A diagonal spread is a multi-leg option strategy that involves two option contract of the same type, either 2 CALL options or 2 PUT options. For a two CALL option strategy, it is called Diagonal Calls. For a two PUT options strategy, it is called Diagonal Puts. Why is it called a spread? It is called a spread because it involves two options contract that is spread across time and/or price. One option contract must be a BUY contract and the other option contract must be a SELL contract. There are two other spread strategies using two options contracts (Calendar spread and Vertical Spread). I will briefly touch on those in this post. Why is it called a diagonal spread? As described earlier, the spread can be across ti