Build a Double Diagonal Strategy

What is a double diagonal?

NeutralLimited ProfitLimited Loss

An expert strategy that is the combination of a diagonal call spread and a diagonal put spread.

As time passes, the profitability range will increase.

ABCDProfitLossStock Price
  • Buy a put at strike A (further expiration)
  • Sell a put at strike B
  • Sell a call at strike C
  • Buy a call at strike D (further expiration)