Value-Trades

Long Put Diagonal Strategy: Real Trade Example


Real Example (July 2025)

A long put diagonal involves buying a longer-term put at a higher strike and selling a shorter-term put at a lower strike. This is useful for traders with a moderately bearish outlook.
  • Stock: XYZ Corp
  • Outlook: Moderately bearish short- to mid-term
  • Setup: Buy 1 XYZ $105 Put (Oct) @ $6.50; Sell 1 XYZ $95 Put (Aug) @ $2.50
  • Net Debit: $4.00 ($400 per contract)
  • Max Loss: $400
  • Max Gain: Depends on movement and volatility
  • Ideal Stock Price at Aug Expiration: Near $95

Outcomes

Stock Price at Aug Expiration Short Put Value Long Put Value Net Value Profit/Loss
$100 $0 $5.50 $5.50 +$150
$95 $0 $7.00 $7.00 +$300
$90 $5.00 $9.00 $4.00 Break-even

Compare With Long Put Calendar Strategy →

Learn Long Put Calendar

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