Short Call Diagonal

Trading a Directional Short Call Diagonal

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Some traders may use the SPX short Call Diagonal simply as a way to collect premium and focus less on the potential directional implications of that trade. That isn’t the way that I trade them because I have certain directional expectations based on chart setups. On the chart (below) I show 2 setups. There are … Read more

Hedging the Short Call Diagonal

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Below is my current Jan17/21 short SPX Call Diagonal. This is the standard 3-day (Fri/Mon) position that I always use but since Jan20 is a market holiday then this 4-day position becomes the standard for this position only. Because SPX has moved lower I have a $2,700 open profit on the position. The initial cost … Read more

The Layering-On Risk Position

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I’m expecting a grind up in SPX over the next 2 months so I’m layering on mostly inexpensive positions (and a few expensive ones) in multiple Fri/Mon expirations to add size and build a position. Below is my current position as of Dec4. I’ll likely be adding the trade below at some point in the … Read more