tired of talking about diagonals as much as you are reading about them so here is last bit for a while..you just:
Bought the jan2014 500strike call
and sold the july 600short call at $11.50
lets say you are a big shot and did this 5times, but you are nervous about those greek elections, or credit default swaps or whatever the crisis of the day on cnbc is and you expect a possible downside move. yep, you keep that $11.50 short call premium but you want more insurance... you can use some or all of that premium to buy put spreads...make it a put spread collar...note i said all or some, you dont have to commit all of it..so if you sold a 5lot and collect about $5600 in premium, you might want to use a 2lot portion of that premium to get some more downside protection for this july opex. with stock at 562:
the july 565/535 put spread is going for about $11.50, with a 2lot on the puts to match the 2lot from the call premium you are committing, this is a zero cost trade with a max gain on the puts of $6000. so worst case if stock is under 535 at opex you keep the $3400ish from the remaing 3 lots of short calls plus the $6000 in put spread profit..thats almost $10000 in profit on just this short call/ collar combo...mentally used to lower the cost basis of your LEAPS...you keep the leaps, and do it again for august.
its all about your thesis going forward...just another tool in your toolbox