Do options spread trades immediately show negative?

SanMiguel

SanMiguel

Although the money from a spread is deposited to your account, do spread trades normally show negative immediately that gets closer to zero until expiry?
Let's say you sell a call spread. I would have thought that it would decrease in value the closer price is too the spread and increase the further away?
 
qwertyjjj said:
Although the money from a spread is deposited to your account, do spread trades normally show negative immediately that gets closer to zero until expiry?
Let's say you sell a call spread. I would have thought that it would decrease in value the closer price is too the spread and increase the further away?
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Assuming it’s a credit spread:
No, only a bit of slippage that you overpaid due to bid/ask spread will show as negative unrealized gain/loss initially.
Other than that, you receive an initial credit but it’s not a loss nor profit.
If it’s a winner then both its value and your P&L will be increasing over time because you can sell it back for a little profit. If you paid -$3 then you may be able to “sell” it back at a higher value like -$2, thus making $1 profit.
 
If you did it through RH, I anticipate you will always get a bad fill. One of the ways RH makes money, is not filling you at the Bid and Ask.
 
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