Best Practices

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Trading Diagonals

Best Practices

Diagonals are slow-moving trades that are placed when implied volatility is low. Tom and TP explore their use in today's Best Practices.

With two expirations, there isn’t a set max profit for a diagonal spread; this is because you don't exactly know what the back month option will be priced at upon the front month's expiration. Tom and TP walk through the slides and provide some guidelines for entering these trades.

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