omg.
He can trade the equivalent call diagonal (OTM) with the same payoff. None of you i***** understand synthetics which is what put him on closing only.
So I profited 820 dollars on a deep ITM options spread and received this email from Tastytrade
- Thread starter Con1991
- Start date
omg.
He can trade the equivalent call diagonal (OTM) with the same payoff. None of you i***** understand synthetics which is what put him on closing only.
The only reason to trade the OP's ITM spread is ignorance.
There is an OTM spread in calls that is equivalent, but instead of a penny risk (74.99 cr) he will pay a three cent db. Consider it a convenience tax. The alternative is this f*ck going to expiration and TT closing it at 80 debit if he's lucky.
If you are stubbornly committed to this then you MUST be cash-secured to carry the thing through expiration. A 5-lot 300-ITM will require at least $150K. Ignores conversion mkt/parity (put debit + same strike call prem). Ignores the debit from the front side assignment.
If you cannot carry it then be prepared to pay an unknowable figure.
There is an OTM spread in calls that is equivalent, but instead of a penny risk (74.99 cr) he will pay a three cent db. Consider it a convenience tax. The alternative is this f*ck going to expiration and TT closing it at 80 debit if he's lucky.
If you are stubbornly committed to this then you MUST be cash-secured to carry the thing through expiration. A 5-lot 300-ITM will require at least $150K. Ignores conversion mkt/parity (put debit + same strike call prem). Ignores the debit from the front side assignment.
If you cannot carry it then be prepared to pay an unknowable figure.
Lord Poopy has the patience of Job.
Or Musk.
correction. he got the limit price he wanted.
doubtful that any trader would just sit there and let that happen.
just close out the position before expiration.
I am not referring to the opening limit or the 1.6 cover. I am referring to filling near the close if the mkt didn’t move enough to avail an exit. A limit order near the close will likely be a debit > spread width.
you need to stop and go away.
Make that doubtful a broker would just sit there and let it happen.
And they didn't in this case. Traders come and go, brokers not so much.
Nobody is going to "let it happen" and that's not the point. The limit order at strike width probably won't fill late in the day so the idiot will be forced to go to a market order. Even a limit order at say 75.20 isn't likely to fill. Before dailies/weeklies you would see spreads blow out at the close.