Buy a longer-dated put, sell a shorter-dated OTM put. Profits from time decay + a moderate drop.
๐ฏ Target
68d from today
โ๏ธ Legs
LONG PUT ยท $385 ยท Oct '26
Qty 1 ยท Premium $29.0 ยท ฮ -0.45
SHORT PUT ยท $365 ยท Sep '26
Qty 1 ยท Premium $15.95 ยท ฮ -0.33
P&L at Expiry
Stock (100 sh)Diagonal Put SpreadNowTarget
๐ก Stock vs Options at Target
If MSFT hits $365 by Sep 18:
the diagonal put spread returns
+$1,364
(104.5%)
on $1,305 risked, vs
$-2,010
(-5.2%)
for 100 shares on $38,510.
Options give 20.1ร capital efficiency.
๐ Expiry
Options expire Sep 18, 2026
(68 days out).
P&L shown is the value at expiry if MSFT is at $365.
Use the 30d / 60d / 90d / 180d pills to compare different expiries.
Forward Projection
Reprices legs at (target_price, target_date) via Black-Scholes. Works on existing BS service. Simplest mode โ ship first.
Historical Backtest
Uses our historical options chains to replay this exact strategy over past expirations. Needs: date picker, "rolling every N days", cumulative P&L chart.
Signal Backtest
"Run this strategy on every BUY-rated stock with score โฅ 80 for last 90d." Reuses score_backtest pipeline + strategy overlay.
Solve for Return
Inverse: user says "+50% in 90d", system solves for required price move, shows IV-implied probability. Pure math.
๐ P&L Scenarios โ what happens at different prices and dates
MSFT Price
Today
Aug 3
Aug 26
Sep 18 (exp)
$308
(-20%)
+$540
+$590
+$618
+$577
$327
(-15%)
+$472
+$555
+$657
+$639
$347
(-10%)
+$345
+$446
+$615
+$839
$365
(-5%)โ target
+$170
+$259
+$428
+$1,277
$377
(-2%)
+$29
+$95
+$219
+$517
$385
(0%)โ spot
-$64
-$16
+$67
+$127
$393
(+2%)
-$159
-$132
-$95
-$201
$404
(+5%)
-$303
-$308
-$337
-$584
$424
(+10%)
-$532
-$583
-$694
-$983
$443
(+15%)
-$734
-$812
-$954
-$1,177
$462
(+20%)
-$899
-$987
-$1,118
-$1,259
Uses MSFT's current IV for repricing. P&L includes all legs (stock + options). Qty: 1x.