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+CH.APTER 14 
+Diagonalizing a Spread 
+When one uses both different striking prices and different expiration dates in a 
+spread, it is a diagonal spread. Generally, the long side of the spread would expire 
+later than the short side of the spread. Note that this is within the definition of a 
+spread for margin purposes: The long side must have a maturity equal to or longer 
+than the maturity of the short side. With the exception of calendar spreads, all the 
+previous chapters on spreads have described ones in which the expiration dates of the 
+short call and the long call were the same. However, any of these spreads can be diag­
+onalized; one can replace the long call in any spread with one expiring at a later date. 
+In general, diagonalizing a spread in this manner makes it slightly rrwre bear­
+ish at near-term expiration. This can be seen by observing what would happen if the 
+stock fell or rose substantially. If the stock falls, the long side of the spread will retain 
+some value because of its longer maturity. Thus, a diagonal spread will generally do 
+better to the downside than will a regular spread. If the stock rises substantially, all 
+calls will come to parity. Thus, there is no advantage in the long-term call; it will be 
+selling for approximately the same price as the purchased call in a normal spread. 
+However, since the strategist had to pay more originally for the longer-term call, his 
+upside profits would not be as great. 
+A diagonalized position has an advantage in that one can reestablish the posi­
+tion if the written calls expire worthless in the spread. Thus, the increased cost of 
+buying a longer-term call initially may prove to be a savings if one can write against 
+it twice. These tactics are described for various spread strategies. 
+THE DIAGONAL BULL SPREAD 
+A vertical call bull spread consists of buying a call at a lower striking price and sell­
+ing a call at a higher striking price, both with the same expiration date. The diagonal 
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