No. of Recommendations: 0
In the meantime, there are still slightly more complex option strategies, such as diagonal spreads, that can provide more acceptable income returns if deployed with savvy and prudence.

I assume by diagonal spread, you mean buy outer month Deep in the money call and sell near month at the money or slightly higher than the current price of the underlying.

What you are essentially doing here is substituting the underlying with the deep in the money calls. Basically reducing your capital commitment and due to low volatility you pay low premium. One has to recognize the risk profile of such strategy is higher than buy-write, of course provides much higher income due to limited capital deployment.
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.