Diagonal Call Spread

bullish2 legs

Sell near-dated call + buy farther-dated call at a DIFFERENT strike.

This structure spans two expirations, so its outcome can't be drawn as a single at-expiration curve — the short leg expires first and the position transforms. Model it interactively in the Strategy Lab.

How it works

Sell a near-dated call at one strike and buy a longer-dated call at a different (usually lower) strike — a calendar with a directional tilt.

When to use it

The "poor man's covered call": the long-dated call substitutes for owning shares while the short call generates income against it.

What can go wrong

More moving parts than any single-expiry spread: direction, time, and volatility all matter, across two expirations.

Price it live in the Strategy Lab Paper trade it free

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Educational content — not investment advice. Options involve substantial risk and are not suitable for every investor. All trading on Opus Options Trading is simulated.