Option Education

[leemalone2k3]

That's an interesting trade. There will still be 4 months of theta on those Jan short puts if the stock doesnt climb considerably by Sept expiration.I dont like to sell long term options and buy short term. I like to buy long term and sell short term. I personally dont sell options out more than 45 days.

Im not so sure on your numbers. It seems to me the max profit is .98. If you sell for 1.10 and buy at .12,you would be paid .98.

It's called a diagonal because you are trading dfferent strikes and different expirations.