Definition of Diagonal spread:
Options strategy involving one long call (or put) and one short call (or put) option, each with a different expiration date and exercise (strike) price but having the same underlying asset.
This strategy can lean bullish or bearish, depending on the structure of the options.
A diagonal spread is an options strategy established by simultaneously entering into a long and short position in two options of the same type (two call options or two put options) but with different strike prices and different expiration dates. Typically these structures are on a 1 x 1 ratio.
Meaning of Diagonal spread & Diagonal spread Definition