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Diagonal spread

• Is the purchase and sale of puts or calls for the same instrument but for different strike prices and different delivery dates. These strategies can be done for debits or credits. Also, they are bullish or bearish depending on the relationship of the purchased to sold strike price. When the lower strike is purchased and the higher strike is sold then the strategy has a bullish configuration. When the lower strike is sold and the higher strike is purchased then the strategy has a bearish configuration.

 
 

Follow this link for all the terms related to spread.

 
 Embedded terms in definition
 Bearish
Bullish
Delivery
Prices
Purchase and sale
Purchase
Sale
Strike price
 
 Related Terms
 

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