Diagonal Spread
In plain English
A calendar spread with a directional tilt — different strikes AND different expiries. You blend a mild directional bet with a time-decay tailwind. Often run as a "poor man's covered call".
How it's built
Like a calendar but with different strikes — a directional + time-decay blend.
Illustrative payoff at expiry on a NIFTY-like underlying (spot 24,000, 7d, 13% IV). The shape is the point — open it in the Strategy Lab to tune spot, time and volatility live.
Max profit₹3,397
Max loss₹3,103
Net premiumDr ₹3,103
Breakevens24,048
When to use it
Mildly directional with a time-decay tailwind; a 'poor man's covered call' when the long leg is deep-ITM and far-dated.
Max profit
Depends on the strikes/expiries; generally capped.
Max loss
Net debit paid (approximately).
Common mistakes
- Mismatched strike/expiry choices that invert the intended exposure.