Options Order Question

E

Erikku

Hi everyone,

I recently switched to trading option spreads and currently using ThinkorSwim Platform.
Had a question I couldn't find the answer to upon searching and was hoping more experienced traders can help.

Is there a way to close out an option spread when the underlying instrument reaches a specific price point? Say for example I have an ongoing call spread on Google and I want to close out the spread when Google stock hits a certain price point.

Thanks.

Erik
 
Erikku said:
I couldn't find the answer to upon searching and was hoping more experienced traders can help.
More...

I guess I may be more experienced with searching because a single google search shows the answer :) :
 
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Part of what you ask for is about 4min into the link provided by guru. Since you indicate you wish to close a spread, and using "market orders" should be generally frowned on... If you are familiar with your product, you should have a handle on how much you are willing to accept from the MID, and you may wish to use a Limit order offset from the MID instead of a Market order. -- Here is an order I have to close a long Call based on underlying price shown below as a reference:
upload_2019-7-12_20-43-20.png


Adding an Alert based on the underlying price may also be wise, so you can verify your order is in place and does not need to be modified!
 
Erikku said:
Is there a way to close out an option spread when the underlying instrument reaches a specific price point? Say for example I have an ongoing call spread on Google and I want to close out the spread when Google stock hits a certain price point.
More...

There are two ways to do this:

  1. Enter a conditional order. Sell XXX call spread at MKT or Limit if the stock trades at XXX. You have to ask TD if TOS has conditional orders. Looks like they do based on the post above.
  2. You calculate the value of the spread if the stock hits that price and enter a limit GTC order at that price. As time passes, you will have to adjust your limit as options prices fluctuate and decay.
 
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