Diagonal Spread
A spread using options with different strikes and different expirations.
Explanation
Diagonal spreads combine directional exposure (strike selection) with time-structure exposure (expiration selection). They are commonly used as defined-risk income strategies, such as poor man’s covered call structures. Their risk/reward depends on both underlying direction and implied-volatility dynamics.
Example
Buy AAPL 140 call expiring in 90 days, sell AAPL 155 call expiring in 30 days.