A diagonal call spread which involves selling a lower-strike call option and buying a higher-strike call option, with the overall position being executed as a credit. In other words, this position is based on the sale of an at-the-money near-month option and the purchase of an out-of-the-money far-month option. For example, a trader may sell one XYZ March 50 call and buy one XYZ April 55 call. The lower-strike call, however, can be the near-month option or the far-month option.

The short diagonal call spread is also known as a diagonal call bear spread.