Buy a longer-dated put, sell a shorter-dated OTM put. Profits from time decay + a moderate drop.
๐ฏ Target
67d from today
โ๏ธ Legs
LONG PUT ยท $1000 ยท Jul '26
Qty 1 ยท Premium $43.8 ยท ฮ -0.46
SHORT PUT ยท $950 ยท Jun '26
Qty 1 ยท Premium $20.1 ยท ฮ -0.28
P&L at Expiry
Stock (100 sh)Diagonal Put SpreadNowTarget
๐ก Stock vs Options at Target
If COST hits $950 by Jun 19:
the diagonal put spread returns
+$3,132
(132.2%)
on $2,370 risked, vs
$-4,847
(-4.9%)
for 100 shares on $99,847.
Options give 27.0ร capital efficiency.
๐ Expiry
Options expire Jun 19, 2026
(67 days out).
P&L shown is the value at expiry if COST is at $950.
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
COST Price
Today
May 5
May 27
Jun 19 (exp)
$799
(-20%)
+$2,223
+$2,280
+$2,294
+$2,287
$849
(-15%)
+$2,074
+$2,224
+$2,343
+$2,307
$899
(-10%)
+$1,702
+$1,936
+$2,259
+$2,480
$950
(-5%)โ target
+$1,049
+$1,253
+$1,607
+$3,262
$979
(-2%)
+$600
+$731
+$951
+$1,354
$998
(0%)โ spot
+$268
+$334
+$424
+$289
$1018
(+2%)
-$64
-$66
-$108
-$547
$1048
(+5%)
-$542
-$634
-$831
-$1,414
$1098
(+10%)
-$1,222
-$1,398
-$1,681
-$2,107
$1148
(+15%)
-$1,712
-$1,889
-$2,110
-$2,315
$1198
(+20%)
-$2,022
-$2,156
-$2,284
-$2,361
Uses COST's current IV for repricing. P&L includes all legs (stock + options). Qty: 1x.