Value-Trades

Long Call Diagonal Strategy: Real Trade Example


Real Example (July 2025)

A long call diagonal spread involves buying a longer-term call at a lower strike and selling a shorter-term call at a higher strike. It benefits from time decay and upward price movement over time.
  • Stock: XYZ Corp
  • Outlook: Moderately bullish short- to mid-term
  • Setup: Buy 1 XYZ $95 Call (Oct) @ $6.00; Sell 1 XYZ $105 Call (Aug) @ $2.20
  • Net Debit: $3.80 ($380 per contract)
  • Max Loss: $380
  • Max Gain: Varies with movement and volatility
  • Ideal Stock Price at Aug Expiration: Close to $105

Outcomes

Stock Price at Aug Expiration Short Call Value Long Call Value Total Value Profit/Loss
$100 $0 $5.00 $5.00 +$120
$105 $0 $7.50 $7.50 +$370
$110 $5.00 $9.00 $4.00 -$20

Compare With Long Call Calendar Strategy →

Learn Long Call Calendar

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