Options Trading Concepts Live - April 16, 2021 - Diagonal Spreads & Skew

published 3 weeks ago by tastytrade, Inc.

Diagonal spreads take advantage of skew if the short option is on the skewed side, because we're able to collect more in the short option we're selling relative to the extrinsic value we're paying for with the ITM long option. This creates a "cheaper" spread compared to the non-skewed side. Tune in to learn about a variety of different setups, and why the tastytrade crew likes diagonal spreads generally more than vertical spreads!

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