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While on a client trip through Europe and North America, I have seen investors go through all five stages of financial market grief about the US: confusion, fatalism, denial, revulsion – and reallocation What a time to be on a client trip through Europe and North America. The ‘US exceptionalism’ narrative that prevailed between the […]

The post TINA McRAE Says ‘Watch Out Ahead!’ appeared first on Action Forex.

Learn Calendar and Diagonal Spreads: Mastering Time-Based Options Strategies

Welcome to Article 6 of the Learn Options Series, where we introduce time-based strategies that add another layer of control and opportunity to your stock options education. These setups go beyond simple directional trades by incorporating the powerful element of time decay to your advantage.

If you’re advancing in your journey of learning options, calendar and diagonal spreads can help you profit from volatility, timing, and price movement with a sophisticated but accessible approach.

What Are Calendar and Diagonal Spreads?

Both strategies involve options with different expiration dates (unlike vertical spreads which share the same expiry).

• Calendar Spreads: Same strike, different expirations

• Diagonal Spreads: Different strike and different expiration

Both are ideal for traders who want to benefit from time decay (Theta) and changes in volatility (Vega).

Calendar Spreads (Time Spreads)

When to Use It:

• You expect the stock to stay near a specific price (neutral outlook)

• You want to benefit from faster time decay in the short-term option

Structure:

• Sell a near-term option

• Buy a longer-term option (same strike)

Example:
Stock ABC trades at $60.

• Sell 1-week $60 call for $1.00

• Buy 1-month $60 call for $2.50

• Net Debit = $1.50

Goal: The stock remains close to $60 by the short option’s expiration

Why It Works:

• Short option decays faster → You profit as long as the stock stays near the strike

• A controlled way to benefit from time decay and volatility expansion

Diagonal Spreads

When to Use It:

• You expect directional movement and want to take advantage of time decay

• You want to build a longer-term position while managing near-term exposure

Structure:

• Sell a short-term option (near-term expiration)

• Buy a longer-term option at a different strike (usually in the direction of your bias)

Example:
Stock XYZ is at $55.

• Sell 1-week $57 call for $1.10

• Buy 1-month $60 call for $2.30

• Net Debit = $1.20

Goal: Stock rises toward—but not far beyond—$57 in the near term

Why It Works:

• Combines the Vega benefit of long-dated options with the Theta decay of short-dated options

• Lets you trade a directional setup while earning short-term premium

Pros of Calendar and Diagonal Spreads in Stock Options Education

• Time Advantage: Profit from the difference in time decay between short and long legs

• Volatility Play: A rise in implied volatility benefits these strategies

• Defined Risk: Net debit paid is the maximum potential loss

• Strategic Flexibility: You can roll or adjust based on movement

Watch Outs for Learners

• Rapid Movement Can Hurt: These are best when the stock doesn’t move too aggressively

• IV Crush: If implied volatility drops suddenly, the long leg can lose value

• Liquidity Considerations: Rolling requires active management

Wrapping Up: Learning Options Through Time-Based Spreads

Calendar and diagonal spreads help you take your options trading beyond simple buying or verticals. By understanding how time, volatility, and price interact, you’ll begin building strategies that thrive in more nuanced market conditions.

These spreads are excellent tools in your options trading 101 evolution—and provide a great stepping stone to advanced setups like iron condors and double diagonals.

Coming up next in the Learn Options Series: Advanced Option Spreads – Iron Condors, Butterflies, and Beyond.

Stay tuned with ForexLive.com (evolviong to investingLive.com later this year), where we continue to deliver clear, strategic, and practical investing education for real-world traders and investors.

This article was written by Itai Levitan at www.forexlive.com.

• Maintaining normal communication with US counterparts
• China is open to negotiations on economic, trade areas
• Calls for US to stop threats and blackmail, to resolve issues on basis of mutual respect

This when asked about the notion that Trump says the ball is in China’s court. In essence, they’re throwing the ball back over or at least trying to make sure that the US actually knows that the ball is actually in Trump’s side of the court instead. And so the dance continues..

This article was written by Justin Low at www.forexlive.com.

Daily Pivots: (S1) 187.02; (P) 188.34; (R1) 189.11; More… Intraday bias in GBP/JPY stays neutral for the moment,, and more consolidations would be seen above 184.35. Risk will remain on the downside as long as 190.06 resistance holds. Below 184.35 will target 180.00 low. Nevertheless, break of 190.06 will turn bias back to the upside […]

The post GBP/JPY Daily Outlook appeared first on Action Forex.

Fundamental
Overview

After a brief consolidation
in the first part of the week, gold eventually broke out into a new all-time
high and surged by more than 3% in just a day. The precious metal has been the
only game in town recently as the uncertainty and risk off flows haven’t even
supported bonds, which generally rise during such times.

But these are not normal
times because the market is fearing stagflation, which hasn’t been seen for
decades. This is an environment where you have lower growth and higher
inflation. Gold thrives during such times. The problem is that “long gold” is
now the most crowded trade, and such parabolic rallies can be wiped out fast if
conditions change.

In the bigger picture, gold
remains in an uptrend as real yields will likely continue to fall as the Fed is
not looking to hike anymore. The risks for the upside in the short term include
another aggressive stock market selloff, a hawkish Fed or positive news on the
tariffs side.

Gold
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that after a brief consolidation, gold skyrocketed once again into new
all-time highs. From a risk management perspective, the buyers will have a
better risk to reward setup around the trendline to position for further upside. The
sellers, on the other hand, will want to see the price breaking below the
trendline and the 2957 level to extend the drop into the 2832 level next.

Gold Technical Analysis
– 4 hour Timeframe

On the 4 hour chart, we can
see that we have a minor upward trendline defining the bullish momentum on this
timeframe. The buyers will likely lean on the trendline to keep pushing into
new highs, while the sellers will look for a break lower to extend the pullback
into the 3195 level next.

Gold Technical Analysis
– 1 hour Timeframe

On the 1 hour chart, there’s
not much else we can add here as the buyers will look for a bounce around the
trendline, while the sellers will look for a break. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we get the latest US Jobless Claims
figures. But as a reminder, the market is focused on tariff negotiations at the
moment, so the data is not as market-moving as it used to be in the past
months. So, we will likely need at least a new cycle high in the Jobless Claims
data to trigger a notable reaction.

Watch the video below

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Daily Pivots: (S1) 161.24; (P) 161.76; (R1) 162.18; More… Intraday bias in EUR/JPY remains neutral as range trading continues. On the upside, above 164.16 will resume the rally from 154.77 to 164.89 resistance, and then 166.67. However, decisive break of 158.27 support will bring deeper decline back to 154.77 support. Overall, sideway consolidation pattern from […]

The post EUR/JPY Daily Outlook appeared first on Action Forex.

Daily Pivots: (S1) 0.8553; (P) 0.8584; (R1) 0.8640; More… Intraday bias in EUR/GBP remains neutral for the moment. Consolidations from 0.8737 could extend but further rise is still expected as long as 0.8518 support holds. On the upside, break of 0.8737 will resume the larger rally from 0.8221. In the bigger picture, down trend from […]

The post EUR/GBP Daily Outlook appeared first on Action Forex.

• Eurostoxx -0.3%
• Germany DAX +0.1%
• France CAC 40 -0.5%
• UK FTSE -0.7%
• Spain IBEX -0.5%
• Italy FTSE MIB -0.4%

The drop here offsets the gains from yesterday, though the broader market mood is looking a little more positive today. There’s a slight bounce in US futures with S&P 500 futures seen up 0.9% at the moment. That is helping to preserve a calmer tone with the dollar also recovering some ground to start the session.

This article was written by Justin Low at www.forexlive.com.