Weekly credit put diagonal on ES and NQ as a partial hedge

Every hedge has a cost: cash, part of the potential upside, or additional position-management risk. Recently, I have been using weekly credit put diagonals on ES and NQ futures options. I usually open the position on Thursday or Friday. I sell a put expiring the following Friday and buy a lower-strike put expiring on the Monday after that. The position is opened for a small net credit. I place the short strike roughly 3% below the current ES price and 4% below NQ. This is approximately where the peak of the modeled P&L profile is located at the first expiration. There are two particularly favorable scenarios: 1. The market does not decline**.** The hedge is not needed, both options remain out of the money, and I keep the credit received at entry. 2. ES declines by roughly 3% over the week, or NQ by around 4%. These are already substantial weekly moves for equity indices. The price finishes near the peak of the profile, and the position can produce a result close to its modeled maximum profit. The main drawback appears when the market drops sharply immediately after entry. The position can show a significant unrealized loss at that stage. Sometimes this is partly offset by a diagonal opened the previous week, but I do not treat that as a guaranteed feature of the structure. A fast decline is usually accompanied by rising volatility. This can widen the profile, expand the modeled profit range, and increase the potential maximum profit. With a slower decline and little change in volatility, the opposite may happen. The outcome depends not only on the market level, but also on how volatility changes across the two expirations. The screenshots show two examples of actual ES and NQ positions that were opened and later closed during market declines. For each trade, I included the profile shortly after entry and again closer to the exit.