How to Sell Vertical Spread Option TD Ameritrade

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NOYB111

Newbie here. How do you close out a vertical spread option on TD Ameritrade? You need to close out both the sell and buy legs together but how do you do that? Do I buy back my sell leg and sell my buy leg individually? Can they be selected together to close out? Thanks for advice...
 
I would highly recommend you close out the order as a spread,assuming TDA has similar spread orders as TOS...

Are there spread capabilities in TDA??
 
NOYB111 said:
Newbie here. How do you close out a vertical spread option on TD Ameritrade? You need to close out both the sell and buy legs together but how do you do that? Do I buy back my sell leg and sell my buy leg individually? Can they be selected together to close out? Thanks for advice...
More...

One trade.
tda.png
 
NOYB111 said:
Newbie here. How do you close out a vertical spread option on TD Ameritrade? You need to close out both the sell and buy legs together but how do you do that? Do I buy back my sell leg and sell my buy leg individually?
More...


  • You can close them individually.
  • Usually the short leg first due to margin requirements.

NOYB111 said:
Can they be selected together to close out? Thanks for advice...
More...


No ..... which can lead to typos while you are entering the order.
 
In the TDA example above. I understand that, but how does that tie into my open positions? If I look at my positions I can see both legs of my spread. So how do I make sure they are closed out? If I go to trades and create a sell to close and buy to close vertical spread arent I just creating a new one or is that canceling out my open positions? I feel like I need to 'select' my open positions somehow first. Thats why I cant see how to do them at the same time in TDA.

PS - thanks to you guys for responding!
 
Leg risk is when you are opening/closing a spread,and instead of sending out a spread order,you choose to buy/sell one side of the spread and then trade the other.Its called "legging" the spread,or you lifted a leg.Problem is,best case scenario you MAY get filled mid market,but if you lift a leg(close one side) and the market suddenly moves against you,you get smashed...

I'm a great mechanical trader,and in TSLA,I get filled on risk free execution spread orders better thsn I do trying to get cute...


OptionsOptionsOptions said:
What is leg risk?
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NOYB111 said:
In the TDA example above. I understand that, but how does that tie into my open positions? If I look at my positions I can see both legs of my spread. So how do I make sure they are closed out? If I go to trades and create a sell to close and buy to close vertical spread arent I just creating a new one or is that canceling out my open positions? I feel like I need to 'select' my open positions somehow first. Thats why I cant see how to do them at the same time in TDA.

PS - thanks to you guys for responding!
More...

@BKR88 posted an image of the spread trade screen for you. You do NOT need to "select" your open position. It will NOT create a new position. You need to select "sell to close" and "buy to close," and that will close your existing position. If you make a mistake and select "buy to open" or "sell to open," that still would not create a new position. It would give you an error message, because it doesn't make sense. If you are long a February 55 call, and you enter an order to "sell to open" for that same call, you will get an error message because if you sell that call, it will close your existing position. In that context it is not possible to "sell to open." "Sell to open," by definition, means selling an option short. You cannot do that if you are currently long that option.

BMK
 
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