Bill Belt, the guest in this video, died on December 26, 2025. He was a warm and friendly man, always willing to help other options traders. He will be missed in the options trading community. Our deepest condolences to his family.

Rolling Put Diagonal is not the best-known options trading strategy, yet it can be very profitable if traded in the right way. Our guest is Bill Belt, an experienced options trader with more than 25 years in the markets. Over the past few years, he has refined the Rolling Put Diagonal into his most consistent and profitable strategy. Bill actively shares his methods and results with the retail trading community through groups, guides, and live discussions, and now in an interview with Theta Profits.

Rolling Put Diagonal: Learn how Bill Belt trades it in this video

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What is the Rolling Put Diagonal?

The Rolling Put Diagonal is a lesser-known options strategy that combines elements of both put credit spreads and calendar spreads. Many traders mistake it for a poor man’s covered call, but it is quite different. It is essentially a hybrid spread with two legs:

• Income leg (short put): Generates a steady premium. Sold short-term and at the money or close to the money.
• Protection leg (long put): Manages buying power and risk. It is placed further out, both in strikes and days to expiration.

The key feature is the rolling of the short put, often daily or multiple times per week. Over time, this rolling action accumulates premium and can transform the position from an initial debit into a credit campaign.

Why traders should care

According to Bill, the Rolling Put Diagonal can generate returns in the range of 15–30% per month of the used buying power, with some months even higher. While these numbers may sound impressive, he emphasizes that proper risk management and market selection are crucial. This is not a high-frequency day trade, but a structured income strategy that works best in slightly bullish or flat market conditions.

How the Rolling Put Diagonal strategy works

1. Setup:
   • Sell an at-the-money short put with near-term expiration (often one day).
   • Buy a longer-dated put, typically 14–30 days out, at a 30–35 delta.
2. Rolling mechanics:
   • Each day, roll the short put forward.
   • If the price rises, roll to the next at-the-money.
   • If the price is flat or falls, roll horizontally at the same strike, capturing intrinsic and extrinsic value.
3. Closing the trade:
   • Campaigns are usually closed before the long put expires.
   • Traders can choose to reopen a new campaign or sit in cash until conditions improve.

This process creates a steady flow of income, while the long put serves as risk protection.

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Risk and reward

Bill places the Rolling Put Diagonal at the lower end of the risk spectrum if traded in the right environment (flat or slightly bullish markets). However, in declining markets, the risk increases significantly. The maximum loss is limited to the distance between the short and long strikes. Active management of deltas and regular monitoring are essential.

He stresses that this is not a set-and-forget strategy. Traders should expect to check the position a few times per day and roll at least once daily.

Tools and indicators

Bill uses a combination of charting tools to guide his decisions:

• 9 EMA line: key signal for trend confirmation
• MACD histogram: momentum indicator
• CCI oscillator: early warning for overbought or oversold conditions

These tools help him decide when to continue rolling or when it’s time to close down a campaign. Get more details in the video.

• Other video interviews you may like:
• Karsten Jeske: How options trading may supercharge your early retirement
• Ravish Ahuja: Double Calendar Spread: The low-risk trade behind an 85% win rate
• Carl Allen: 21DTE Put Broken Wing Butterfly: A high probability options strategy

Results and performance

Bill reports monthly returns of 15–40% based on buying power usage. Annualized, this equates to 200–300% growth. While impressive, he cautions against over-leverage: he typically allocates only 25% of his account to this strategy, leaving the rest in cash or other investments. Importantly, he has had only two losing months in the past several years, both during sudden market drops.

Key takeaways for traders

• Use the strategy only in flat or slightly bullish conditions.
• Roll daily to capture time decay and manage risk.
• Think of it as a steady income system, not a get-rich-quick approach.
• Paper trade before committing real capital.

Where to learn more

• The Facebook group Rolling Put Diagonal Option Spread
• Bill Belt’s trading plan document
• Bill Belt’s indicators on Tradingview
• Here are the exact trades Bill did in Q3 – 2025 and the financial results (Excel sheet for download)

Options trading book recommended in this video

• Lawrence G. McMillan: Options as a Strategic Investment