As the name suggests, a Double Diagonal is a type of Diagonal Spread. The strategy is composed of a Diagonal Call Spread and a Diagonal Put Spread.
Diagonal Spreads involve going Short an Out Of The Money Strike Price of the Front Month and Long a different Out Of The Money Strike Price of an expiry month that is further away. For a double diagonal, diagonal Spreads on both Put and Call are initiated.
The profit/loss diagram of a Double Diagonal has some similarities to those of an Iron Condor. The difference is that Double Diagonals benefit from an increase in volatility, whereas Iron Condors do not. As with Iron Condors, however, the price of the underlying must remain within a range for them to be profitable.
See the Double Diagonal Options Strategy at OptionCreator.com
Contributed by: Ralph Windsor
Diagonal Spreads involve going Short an Out Of The Money Strike Price of the Front Month and Long a different Out Of The Money Strike Price of an expiry month that is further away. For a double diagonal, diagonal Spreads on both Put and Call are initiated.
The profit/loss diagram of a Double Diagonal has some similarities to those of an Iron Condor. The difference is that Double Diagonals benefit from an increase in volatility, whereas Iron Condors do not. As with Iron Condors, however, the price of the underlying must remain within a range for them to be profitable.
See the Double Diagonal Options Strategy at OptionCreator.com
Double Diagonal
Related Directory Entries
Featured Video
Trading Double Diagonals in the current Market
Mark Fenton describes the Double Diagonal strategy in this Sheridan Options TV video.
View Sheridan Options Mentoring in Options Market Glossary Directory
External Links
The Ultimate Guide to Double Diagonal Spreadshttp://www.optionstradingiq.com/the-ultimate-guide-to-double-diagonal-spreads/
An article by Gavin McMaster explaining how to set up and manage Double Diagonals.
View Options Trading IQ in Options Market Glossary Directory
Double Diagonalhttps://www.optionsplaybook.com/option-strategies/double-diagonal-spread/
An optionsplaybook.com article which provides the basic setup and characteristics of Double Diagonals.
View The Options Playbook in Options Market Glossary Directory
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