Guided trades with notifications your way:
Diagonal Spreads at a Glance
- Low capital requirements - you don't have to own stock
- 20% - 30% targeted annualized returns
- Up to six new trades each month
- 8-10 open trades at a time
- Complete guidance from opening to exit
- Email SMS and Push notifications on managing each trade
- Managed by professional options analysts
- Review analyst notes on every trade
Diagonal Spreads Strategy
This is a simulated covered call that uses a long-dated in-the-money call option to substitute the long stock position. It simulates a covered calls by selling a short-term call while simultaneously buying a long-term call at a lower strike price. This allows for a greater rate of return, and the trade remains profitable if the stock rises, goes sideways or even dips a bit.
Diagonal Spread Ideal Result
Ideally, the diagonal spread trade closes the position for a full profit before the sold call expires. The objective is for the sold calls to be in-the-money during the week before expiration where we exit the position for a larger profit than targeted. To exit, one buys back sold calls and sell long-term call for a net credit. The credit will generally be larger than the difference between the strike prices of our options.
Diagonal Spreads Performance
Through June 2018 the Diagonal Spreads Portfolio has an annualized return of 26.75%. 69 out of 79 trades were winners for a 87.34% win rate.
To see the trade history of the Diagonal Spreads Portfolio, feel free to visit the Closed Trade page.
Investing in stocks, bonds, option and other financial instruments involve risks and may not be suitable for everyone.
Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options. Copies of this document are available at http://www.cboe.com/Resources/Intro.aspx or from your broker. Copies are also available from the Chicago Board Options Exchange, 400 S. LaSalle Street, Chicago, IL 60605. The OCC Prospectus contains information on options issued by The Options Clearing Corporation. Copies of this document are available from The Options Clearing Corporation, 440 S. LaSalle Street, 24th Floor, Chicago, IL 60605 or the Chicago Board Options Exchange, 400 S. LaSalle Street, Chicago, IL 60605. The documents available discuss exchange-traded options issued by The Options Clearing Corporation and are intended for educational purposes. No statement in the documents should be construed as a recommendation to buy or sell a security or to provide investment advice.