Getting Out of Calendar Spread that is locked DITM

How do you mean 'the other way around'? If he's short the 170 put and long the 150 put then he would need to buy the 170 put and sell the 150 to close.
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He's long the 170 put since he said in his original post: "I can exercise the 170s as long, but not the 150s as short."

Yes, the options are illiquid with wide spreads. The Oct 150/Sep 170c diag would cost 70 cts. which isn't much better than closing the 20 pt. put spread for the natural credit of $19 ( - $1.00). Given those two choices, I'd buy the Sep 150c for 40 cts, assuming no generous splitting of B/A's by the MM.
 
I am long the 170s. Am more than willing to wait for expire except the tieup of capital. Am not worried about losing profit. Would guess that any strat to get the capital back would be as bad as paying the spread to close.

So have a question, is the other side of teh trade actually getting interest on the trade? I have $15k tied up. Is mister X getting interest on that 15K as he is short the 170s and getting $15k extra margin?

That would explain why noone has taken the trade at fair market.

BTW good discussion on a common problem.
 
I think that no one is taking the trade because who wants to give the Mkt Mkr his pound of flesh? As I type, I see up to $2 spreads in your puts. That's quite a hammering to get out.

As you indicated, waiting for expiration is prudent. With DB down more today, I'd put in a low ball offer for the Sep 150c's for a nickel and just wait em out. It's unlikely that DB will rise but I'll always toss a nickel to guard a gain, particularly where you have to wait it out. But that's just my comfort zone.

Good luck!
 
Thanks spindr. As these days we can make the bid and ask, we can get around the MM, my B+A shows, so another retail customer can hit it, or whoever is on other side of trade, but they are not.

So maybe they are are getting interest on $15k with no capital up front, just a little bit of risk.

Is that possible? interested in comments from anyone. Might be a strategy to play.
 
Quote from Opra:

If broker is IB, request a real time exercise on both legs, since there is no prem left. No exercise fees. Not sure if there are other fees since I have not experienced such situation.
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You cannot ask the holder of the Sep puts to exercise. He exercises when ever he wants to.
 
I put combo trade for 14.90 (15 fair mkt price) so gave up $70 for 2.5 months or annualized $350 interest on $10,500 equity tied up or about 3.25% interest, so better than my margain cost.


The question remains is the other side of the trade ( lets say Oct 170-155P credit Verticle Sprd for simplicity) getting Interest on the $15,000 credit on the trade? Just as long as DB now 125 does not go to 155 by Oct The credit side of this trade has no risk and he may be getting interest with no investment?

If so maybe a strategy that is played, very low risk DITM vert credit sprds to get the interest with no or little margin use?
 
It ate my title, which was got out of 7 for only .10 sprd loss.


I put combo trade for 14.90 (15 fair mkt price) so gave up $70 for 2.5 months or annualized $350 interest on $10,500 equity tied up or about 3.25% interest, so better than my margain cost.


The question remains is the other side of the trade ( lets say Oct 170-155P credit Verticle Sprd for simplicity) getting Interest on the $15,000 credit on the trade? Just as long as DB now 125 does not go to 155 by Oct The credit side of this trade has no risk and he may be getting interest with no investment?

If so maybe a strategy that is played, very low risk DITM vert credit sprds to get the interest with no or little margin use?
 
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