Business and Personal Finance Dictionary

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z 

• 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.
  
  Back