Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

When to Execute Bearish Diagonal Put Spread

33 sec read

When to Execute this Strategy

When the Market Expectation is Bearish to Sideways or you are expecting choppy environments with a clear resistance and supports and at the same time you want to avoid if any extreme downside or upside risk as you are dealing with high volatile and uncertain environments.

Bear Call diagonal spread creation

Short 1 lot of 9250PE – Current week expiry @ 124.3/lot
Long 1 lot of 9400PE – next week expiry @ 277.50/lot

Breakeven levels are at 8505 – 9463 levels and the strategy also has limited risk and limited reward style which suits execution especially after a big gap down day where you have to come up with controlled thinking.

Reward will be maximum if Nifty Spot expires at 9250 levels.

What-If Scenario

UnderlyingExit DateProfit/LossPNL %
8,500.0014-May-20-75.72-0.66%
8,550.0014-May-20-6.07-0.05%
8,600.0014-May-2088.110.77%
8,650.0014-May-20213.461.86%
8,700.0014-May-20377.783.29%
8,750.0014-May-205905.13%
8,800.0014-May-20860.127.49%
8,850.0014-May-201,199.1310.44%
8,900.0014-May-201,618.7914.09%
8,950.0014-May-202,131.4118.55%
9,000.0014-May-202,749.5323.93%
9,050.0014-May-203,485.6030.34%
9,100.0014-May-204,351.5737.87%
9,150.0014-May-205,358.5246.64%
9,200.0014-May-206,516.2856.71%
9,250.0014-May-207,833.1068.17%
9,300.0014-May-205,565.3448.44%
9,350.0014-May-203,467.2830.18%
9,400.0014-May-201,540.9613.41%
9,450.0014-May-20-213.86-1.86%
9,500.0014-May-20-1,799.63-15.66%
9,550.0014-May-20-3,220.93-28.03%
9,600.0014-May-20-4,484.20-39.03%
Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

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One Reply to “When to Execute Bearish Diagonal Put Spread”

  1. Entry

    Short 1 lot of 9250PE – Current week expiry @ 124.3/lot
    Long 1 lot of 9400PE – next week expiry @ 277.50/lot

    Exit on Expiry on 14th May 2020

    Short 1 lot of 9250PE – Current week expiry @ 107/lot
    Long 1 lot of 9400PE – next week expiry @ 331/lot

    Net Gain from

    Short 1 lot of 9250 – Rs 17/lot
    Long 1 lot of 9400 – Rs 54/lot

    Total Gain = 71 points x 75 = Rs5325

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