Double Diagonal

Two diagonal spreads creating a time decay position

What is Double Diagonal?

Double Diagonal A combination of two diagonal spreads — a put diagonal and a call diagonal — creating a position similar to a double calendar but with different strikes for the near-term and long-term options. Profits from time decay on the short near-term options while the longer-term options provide protection.

Complete Definition

A combination of two diagonal spreads — a put diagonal and a call diagonal — creating a position similar to a double calendar but with different strikes for the near-term and long-term options. Profits from time decay on the short near-term options while the longer-term options provide protection.