Options explanation of a DIAGONAL. This is not a trade alert from here!!!
This is a real life example of my DIA trade this week.
It is a picture perfect successful Diagonal: These are a directional bet.
> DIA: I bought the 12/28 256 calls and
> I also sold 257 calls for 11/30 expiration against them.
Net result is a call diagonal spread.
>> The .31 i collected from the sale of today's calls went to max gains for me. So in essence I only paid 3.29 for my 12/28 calls which are now almost $4.
>>> Now I can close the whole thing for profit...
--- OR risk the Monday open. If DIA spikes then these calls will explode in value. Else I have some room to lose without much heartache.