From Theory To Practice - July 8, 2021 - Diagonals in High-Priced Stocks

published 2 weeks ago by tastytrade, Inc.

Diagonal Spreads are one of our favorite low implied volatility strategies. They allow us to not only play a directional bias in a given stock, but also benefit from the simple passage of time, much like we do with a standard short premium trade. Still, as we see in today’s show, Diagonal Spreads rarely set up for high-priced stocks, as the cost of the strategy is often far too great relative to its profit potential.

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