Thinking about trading multi-leg spreads can be quite daunting to those starting out with limited capital. For example, a one lot short straddle requires close to Rs. 100K in margin, and another 50-80K if you want to hedge it properly. So what's the alternative to just taking on full leverage and going long options? Let me present one way. Don't get too caught up with the name. A diagonal simply means buying a call or a put option in once expiry cycle, and selling a call or a put in another expiry cycle. Here's the margin-efficient setup that Uncle Theta likes: Buy the far month in-the-money option, sell the near month out-of-the-money option. Liquidity is important here, so we like it only on the NIFTY right now. We'll discuss more about how this works in #strategic-options on Slack. But if you're really curious, here's a trade we plan to do tomorrow. But first, we need some context to make a trading decision.