Strategy - DIAGONAL SPREAD (details below)

• bullish
  • very bullish
  • moderately bullish + certain that the market will not fall
  • moderately bullish + fairly certain that the market will not fall
  • bearish in immediate near-term (weeks) + bullish in longer term (months)
• bearish
• neutral
• volatile

Strategy Implementation
A near-dated call option is sold, and a longer-dated, further out-of-the-moneycall option is bought.

Upside Potential
Unlimited, if the bought option is held after the short option expires (the position then becomes a straight-forward buy call). If the position is closed at expiry of the near option, maximum profit will accrue if the market is at the level of the sold strike.

Downside Risk
Limited to the difference in strikes plus/minus the initial debit/credit when establishing the spread.

Margin
Yes, but off-set may apply.

Comment
There is a risk of the sold options being called (i.e. being exercised).