"How to Trade Diagonal Spreads in Singapore ?"
Most investors try to time the market perfectly — but high-income professionals use a smarter approach. Instead of guessing the next move, they use Diagonal Spreads, an options trading strategy that profits from time decay, directional bias, and volatility differences all at once.
It’s one of the most flexible and cost-efficient strategies in the options world, and you can start with as little as $1,000 per trade.
💡 What Is a Diagonal Spread?
A Diagonal Spread is a combination of two concepts:
A Calendar Spread (different expiry dates)
A Vertical Spread (different strike prices)
You structure it by: 1️⃣ Buying a longer-term option (usually in-the-money) 2️⃣ Selling a shorter-term option (usually out-of-the-money)
This allows you to: ✔ Collect premium ✔ Benefit from faster time decay ✔ Maintain directional exposure ✔ Keep total cost low
Diagonal spreads are extremely useful for high-income Singapore investors who want precision and consistent returns without over-committing capital.
💵 Real ~$1,000 Example ( $SPDR S&P 500 ETF Trust(SPY)$ ETF)
ComponentDetailsUnderlyingSPY (S&P 500 ETF)Current PriceUSD 500Buy490 Call (60 days) @ USD 15Sell505 Call (7 days) @ USD 2Net CostUSD 13 per share ≈ USD 1,300 total
This example can be adjusted depending on contract size and broker availability, but the structure remains the same.
📊 How This Options Strategy Performs
Scenario 1 — SPY Moves Slowly Upward
Your short-term call expires worthless. You then sell another weekly call. ✔ Weekly income ✔ Your long call gains value ✔ Ideal diagonal spread setup
Scenario 2 — SPY Drops
Your short call still decays and offsets part of the long call’s loss. ✔ Lower overall risk ✔ Controlled downside
Scenario 3 — SPY Rallies Strongly
Your short call may need adjustment (rolling). ✔ Manageable risk ✔ Still a structured, disciplined trade
Diagonal spreads are built for investors who want flexibility without excessive risk.
⚙️ Why High-Income Investors Prefer Diagonal Spreads
✔ Generates recurring income ✔ Cheaper than buying long calls outright ✔ Benefits from time decay and trend direction ✔ Works well for diversified portfolios ✔ Perfect for $1,000–$5,000 trade sizing ✔ Featured inside the Best Options Trading Course in Singapore for Millionaires
Diagonal spreads are the go-to choice for professionals who want a smart, structured way to grow their wealth.
**Smart investors don’t trade one time frame.
They profit across multiple time frames.**
That’s the power of the Diagonal Spread.
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