Diagonal Spread with Puts Option Strategy

A diagonal put spread sells a nearer dated put at one strike and buys a longer dated put at another, so the position collects time decay on the front leg while the back leg stays alive after the short one expires. Because the legs differ in both strike and expiration, the outcome turns on where the underlying sits at the front expiry and what the remaining put is worth then.

Fifteen day and nine month volatility columns sit next to the quotes for exactly that reason: a diagonal is a position on the term structure as much as on direction.