Legging into spreads and their max profits

[Ranko19]

Question about legging into a vertical spread to lock in profits.

Example is:

Buy SPY 313 Put for a debit of 1.35

Write SPY 312.5 Put for a credit of 1.81

Is my gain of 0.46 a max or a min? Is there a max gain if SPY closes below the short? Reason I ask is I used OptionsProfitCalculator to see where my losses were and it showed a potential max gain if held through to expiry and if SPY closed below 312.5 today.

 

[OptionsOptionsOptions]

Why not sell-to-close the SPY 313 Put to "lock in profits"?

 

[Ranko19]

Why not sell-to-close the SPY 313 Put to "lock in profits"?

Would've been marked for PDT

 

[Robert Morse]

Before fees, you locked in a profit of $0.46. If you hold until expiration, and the SPY is above 313, you keep the $0.46. If the SPY is below 312.50, you make another $0.50 for a total of $0.96 before fees. If the SPY is between 312.50 and 313 or even close on expiration day, you will need to exit the spread or risk a stock position the following trading day. More fees. If it were me, I would never do a SPY spread with a 0.50 difference as that is very small for an index at that price, I would have taken my profit instead.

 

[Ranko19]

Before fees, you locked in a profit of $0.46. If you hold until expiration, and the SPY is above 313, you keep the $0.46. If the SPY is below 312.50, you make another $0.50 for a total of $0.96 before fees. If the SPY is between 312.50 and 313 or even close on expiration day, you will need to exit the spread or risk a stock position the following trading day. More fees. If it were me, I would never do a SPY spread with a 0.50 difference as that is very small for an index at that price, I would have taken my profit instead.

Thanks for the information. I'm on RH so no fees this was just a small play that I was afraid would run away with profits.

Didn't know about landing in between the strikes as resulting in what you explained so that is good to know for the future. Thanks.

 

[Robert Morse]

Well, there are regulatory fees. It must be nice to pay no commissions and have no one to talk to. Cheers, Bob

Thanks for the information. I'm on RH so no fees this was just a small play that I was afraid would run away with profits.

Didn't know about landing in between the strikes as resulting in what you explained so that is good to know for the future. Thanks.

 

[Ranko19]

Well, there are regulatory fees. It must be nice to pay no commissions and have no one to talk to. Cheers, Bob

Yeah, reason why I'm here haha.

 

[You]

Ha..
You're missing the sarcasm.

Robert, who helped you, is making fun of the terrible support you are getting from your RH broker, and that you're coming here, getting answers from him.

Robert is from Lightspeed, a competing broker. Fees, but great support.

Personally, after leaving RH over a year ago, I would never return. It's option layout is so confusing. You can't see PUTS with CALLS, or see the GREEKS or other important information all at the same time. Ordering is also frequently confusing. I've made so many mistake orders in the past, orders not getting filled at my price, taking too long to fill, losing more money than I would have paid in fees many many times over.

I happen to look at it a few days ago and memories of all my issues, frustrations, and nightmares came rushing back. If you like it, that's fine. We all have different requirements and needs.

 

[Ranko19]

Ha..
You're missing the sarcasm.

Robert, who helped you, is making fun of the terrible support you are getting from your RH broker, and that you're coming here, getting answers from him.

Robert is from Lightspeed, a competing broker. Fees, but great support.

Personally, after leaving RH over a year ago, I would never return. It's option layout is so confusing. You can't see PUTS with CALLS, or see the GREEKS or other important information all at the same time. Ordering is also frequently confusing. I've made so many mistake orders in the past, orders not getting filled at my price, taking too long to fill, losing more money than I would have paid in fees many many times over.

I happen to look at it a few days ago and memories of all my issues, frustrations, and nightmares came rushing back. If you like it, that's fine. We all have different requirements and needs.

Oh I definitely understand the sarcasm coming from him. RH is pretty terrible but easy to use I guess.

What is a good trading platform for mobile? I can't really find a good answer between TDA, Fidelity, TW, or E Trade.

 

[You]

IB is ok, but I still don't like it.
I don't like most mobile offerings.

Even when I used RH, I preferred using it through a browser.

TW, I also prefer the desktop/browser.

Anytime I've HAD to resort to mobile, because I wasn't at my PC, it was a bad trade. I didn't have all the information I needed to make the best decision.