Every year, options traders chase the next big strategy. One month it’s 0DTE trades. The next month, it’s the wheel. Then credit spreads regain the spotlight before iron condors take over again. Social media accelerates this cycle, driving traders toward strategies that look exciting but often fail to deliver consistency.
Yet, behind the noise, there’s one strategy that continues to outperform for traders who prioritize structure, controlled risk and steady growth. It’s not flashy. It’s not trending. You rarely hear beginners talk about it. But for disciplined traders, it’s becoming a secret weapon.
This is the Diagonal Spread, the most underrated options strategy that actually works.
Before diving into why diagonal spreads stand out, it’s important to understand the environment traders operate in today.
Popular strategies like 0DTE trades, covered calls, wheel variations, credit spreads and broken-wing butterflies dominate YouTube, Reddit and TikTok because they’re visual, fast-moving and easy to explain. But the problem is:
They encourage overtrading
They rely heavily on short-term emotional decisions They can break quickly during volatility shocks
Beginners often misuse sizing and timing They offer inconsistent learning loops
In reality, most traders don’t lose because strategies are bad, they lose because the strategies they choose don’t match the market, their schedule, or their level of discipline.
Diagonal spreads solve this in a way that few strategies can.
A diagonal spread combines the benefits of a calendar spread with the flexibility of a directional options trade. In simple terms, you:
Buy a longer-dated option (30–60+ days to expiration)
Sell a shorter-dated option (7–14 days to expiration) Choose both legs in the same direction (bullish or bearish)
Manage the position as time decay works for you
This structure allows traders to generate income while still maintaining a directional bias,but with reduced risk, lower cost, and more flexibility than simply buying or selling options outright.
It’s elegant. It’s conservative. And it thrives in the market’s current environment.
The current market is unpredictable: news-driven spikes, sudden volatility drops, aggressive reversals and mixed macro conditions. Traditional trend-following strategies often struggle in this kind of environment.
But diagonal spreads adapt beautifully.
1. Theta Works in Your Favor
You benefit from the rapid decay of the short-term option you sell, which helps offset the cost of the long-term option.
2. You Get Controlled Directional Exposure
Unlike vertical spreads, you can fine-tune delta more precisely. That makes it easier to adjust to fast-moving conditions.
3. They Handle Volatility Better
Because the long option decays slower and often carries lower implied volatility, your risk is more stable.
4. They Are Affordable
A diagonal can cost significantly less than buying a long call or put.
5. They Are Flexible Around Events
Earnings, CPI reports, Fed announcements, all benefit from the diagonal’s blend of exposure and protection.
In short: diagonal spreads give traders room to breathe.
Here’s the simple version of how disciplined traders use diagonal spreads:
1. Choose a Direction
Bullish → long call diagonal
Bearish → long put diagonal
2. Buy a Longer-Dated Option
30–60 DTE is common.
This gives you stability and resilience against small pullbacks.
3. Sell a Shorter-Dated Option
About 7–14 DTE.
This generates income and accelerates your theta gains.
4. Monitor Delta and IV
Diagonal spreads are sensitive to volatility differences.
Lower short-term IV and higher long-term IV often create better setups.
5. Roll the Short Leg Weekly
This allows steady income generation and keeps the strategy active.
6. Exit When Profit Targets Hit
Most traders aim for a percentage return rather than holding until expiration.
It’s simple to understand, but powerful when used with a disciplined rule set.
Even though diagonal spreads are forgiving, beginners often make these mistakes:
With proper guidance, these mistakes are easy to avoid, and that’s where education and community matter.
Diagonal spreads rely on timing consistency and weekly structure.
1. “Perfecting 7-Day Options Timing”
This video explains how to identify optimal time windows for weekly trading, exactly what diagonals need to function well.
2. “A Blueprint for 1% to 2% Weekly Returns: Weekly Options”
This video reinforces the importance of structured weekly cycles and strategies that capitalize on theta in a disciplined manner.
The diagonal spread is powerful, but like all structured strategies, it performs best when used with:
That’s exactly what you get inside Dorian Trader’s Trading Club.
Members learn:
If you want to trade diagonal spreads with confidence, not guesswork, this is where you learn.
Most traders chase the strategies that make noise.
Few focus on the ones that consistently build skill and income.
Diagonal spreads are not flashy.
They don’t trend on social media.
They don’t promise overnight gains.
But they do offer stability, flexibility and a disciplined framework, exactly what traders need in 2025.
If you want an underrated options strategy that actually works, this is the one.
And if you want to master it the right way, The Trading Club is the best place to start.
Join a free session, meet traders like you, and see how Dorian Trader turns curiosity into confidence.
1. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.