Double Diagonal

Double diagonals have lower gamma (less sensitive to movement), long vega (benefit from IV increase), and can be rolled perpetually. Use when you want a longer-term position with less daily P&L volatility.

Back month options have more time value than front month options. Since you're buying back month (expensive) and selling front month (cheaper), the net is usually a debit. You're paying for reduced gamma risk.

If stock is between shorts, they expire worthless (good). You then either close the back month longs to exit, or sell new front month shorts against them to continue. Plan before expiration.

Yes, but Singapore only has monthly expirations. Your front-to-back gap will always be approximately 30 days. This works fine but limits flexibility compared to markets with weeklies.

The tested short will be ITM, but your back month long provides some protection. You'll have a loss, but it's limited. The back month long partially offsets the short's loss.

You're long vega, so IV increases help and IV decreases hurt. If you expect a volatility event, the double diagonal may benefit. If IV is crushing, your back month longs lose value faster than your shorts.

Roll if your outlook remains range-bound and term structure is favorable. Close if: (1) You've hit profit target, (2) Outlook has changed, (3) Term structure is unfavorable, (4) One side is deeply tested.

Options include: Roll the tested short further OTM, close the entire tested diagonal side, add protection by buying closer long, or close the whole position. Choose based on conviction and cost.

With monthly-only options, use front month at 30-45 DTE and next month (back) at 60-75 DTE. This gives good theta differential while maintaining the time spread benefit.

Double diagonal has DIFFERENT strikes (shorts closer to money, longs further OTM). Double calendar has SAME strikes (pure time spread). Diagonal has wider profit zone but more complex payoff.

Front month shorts closer to ATM increase theta. Back month longs further OTM decrease vega. Fine-tune strike selection to maximize theta while keeping vega at acceptable level for your view.

Inversion (front > back IV) often signals fear or event premium. For existing positions, consider closing as the structure is unfavorable. For new entries, wait for normalization unless you specifically want that exposure.

Establish rules: entry term structure, DTE triggers for rolling (e.g., 10 DTE), profit/loss targets per cycle, and sizing. Roll systematically - when front reaches trigger, close front and sell new shorts against back, then add new back longs.

They provide diversification: DD long vega vs IC short vega, DD lower gamma vs IC higher gamma. Consider allocating 60-70% to ICs and 30-40% to DDs for balanced volatility exposure.

Unbalanced DD: More contracts or closer strikes on favored side. Skip-strike DD: Wider gap on less-favored side. Can also run single diagonal on favored side with IC characteristics on other.