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 $370 ยท Jul '26
Qty 1 ยท Premium $21.75 ยท ฮ -0.44
SHORT PUT ยท $350 ยท Jun '26
Qty 1 ยท Premium $11.25 ยท ฮ -0.3
P&L at Expiry
Stock (100 sh)Diagonal Put SpreadNowTarget
๐ก Stock vs Options at Target
If MSFT hits $350 by Jun 19:
the diagonal put spread returns
+$1,372
(130.7%)
on $1,050 risked, vs
$-2,087
(-5.6%)
for 100 shares on $37,087.
Options give 23.3ร capital efficiency.
๐ Expiry
Options expire Jun 19, 2026
(67 days out).
P&L shown is the value at expiry if MSFT is at $350.
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
May 5
May 27
Jun 19 (exp)
$297
(-20%)
+$787
+$834
+$860
+$831
$315
(-15%)
+$711
+$793
+$886
+$878
$334
(-10%)
+$569
+$668
+$825
+$1,048
$350
(-6%)โ target
+$393
+$479
+$632
+$1,405
$363
(-2%)
+$220
+$277
+$375
+$567
$371
(0%)โ spot
+$118
+$154
+$210
+$195
$378
(+2%)
+$15
+$29
+$40
-$112
$389
(+5%)
-$138
-$156
-$208
-$462
$408
(+10%)
-$375
-$436
-$553
-$809
$427
(+15%)
-$574
-$656
-$785
-$964
$445
(+20%)
-$730
-$813
-$920
-$1,023
Uses MSFT's current IV for repricing. P&L includes all legs (stock + options). Qty: 1x.