Spread Combo Names

[smiles]

On Friday, I decided to roll an AMZN bull put spread that was deep ITM out to a further period and still deep ITM strikes for some reason. I am not happy with the decision making but I will leave that part alone.

I made what I believe to be several poor decisions here but what has been done is done so...


My concern/question is that I rolled a short $1815 Put and a long 1812.50 put into a short $1800 with a long 1797.5 put which should be a bull put spread from what I think I know. Now, I paid a net debit to do this so I don't know if that is part of the reason TWS is doing this, but the position is continually showing up as a bear put spread, which kept confusing me so I double checked the portfolio page in IB's online portal and additionally, confirmed I at least opened what I thought I did with support and they confirmed it is short the 1800 and long the 1797.5 which is what I visually confirmed with the other sources.

Before this post I was looking at TWS again trying to figure it out and when I right clicked on the spread, I decided to click the "Flip Combo to X/X Bull Put." It immediately just renamed the spread to the above and that is seemingly all it did. So while I do prefer it labeled appropriately, I am still wondering why it was labeled a bear spread in the first place and what this "flip" is supposed to be used for or what I am missing.

Appreciate any clarification.

Thank you.

 

[tommcginnis]

Think about buying a bullish put, and selling a bearish put.

Toe-may-toe, toe-Ma-toe.

Just an artifact of construction.

If I followed your post correctly, take a look at the pricing, as well: you should see the spread contract pricing reverse signs. That's where the *real* difference lies.

 

[smiles]

Think about buying a bullish put, and selling a bearish put.

Toe-may-toe, toe-Ma-toe.

Just an artifact of construction.

Thank you for the prompt response.

Yeah I had been thinking about that I suppose, but I thought it was odd that the roll tool identified that I was rolling into the bull put but then labeled it a bear put, but I definitely did notice that the combined position was now showing as -1 and red for the position size whereas before it had been a positive 1 and green.

Is there any reason or some sort of benefit for it to be looked at one way compared to the other when I had previously had it reading as a bull put?

And it just overall seems counterintuitive that it seems to show up as a net long position that I "bought" (this is what IB shows in the windows when opening it for me) when I received a net credit for it and more concerned with the performance of the short leg than the long. I dunno, still learning though, so likely missing something.

 

[tommcginnis]

You're missing nothing at all.

It is an annoyance and a distraction, unless you work to have your TWS set up specifically to go one way or the other. (And yet, you can't do anything about the writing of it, or the conversations you'll get into, where you have to listen closely to the whole context to see if a clue was dropped whether the position closest to the market (the ONLY thing that matters) was long or short.

And FWIW, think about butterflies! Think about a broken-wing call butterfly that you've "bought" for a negative price! Your closest strike is still long, yet the market *paid* you for your troubles. (Still, if the majority of your work is with verticals, then that's a small distraction. And besides, *hopefully* when the time comes to exit, the price will turn from -$0.50 to +$0.75 or whatever -- would you sell *that* to exit?!? )

There are things in the default TWS set-up that want to throw you into verticals as going the other way. Poor Colleen (IB's host/hand-holder in the very-good videos) has had to work with this 'forever.' I would tell you how I got mine to register correctly, but I simply forgot -- been way too long ago. But I can tell you this: FIDDLE WITH IT. It WILL submit. You just have to have a firm hand.

 

[smiles]

Again, thank you for the quick response, sorry I am late to the party.

It is good to know I am not crazy at least lol.

"the position closest to the market (the ONLY thing that matters) was long or short."

I think this statement has provided some extreme clarity for myself, as while I think it is something that I have thought about in a more simple form, I have never had that specific statement said to me in that way and I think it holds quite a bit of merit. When I opened the intial spread, the were both OTM but the short was closest to the market but when I decided to roll into an already deep ITM spread, the long was closest. Such a simple thought but so important as now I believe the position has to perform much differently than had I rolled it the other way, more or less the appropriate way as well.

I will have to find those videos but there are several other weird nuances with TWS that bother me, but that is for another time I suppose. I need to develop some other understandings first, anyway probably.

I appreciate the clarification and insight. Definitely will always think about the above comment with more diligence.

 

[tommcginnis]

There are things in the default TWS set-up that want to throw you into verticals as going the other way. Poor Colleen (IB's host/hand-holder in the very-good videos) has had to work with this 'forever.' I would tell you how I got mine to register correctly, but I simply forgot -- been way too long ago.

Yeah, and it's Cynthia -- Cynthia Tomain, not Colleen. THAT's how long it's been.


(Still, the point holds: pretty much *everything* in TWS is doable 3 or 4 ways. And set-ups! Page set-ups, order set-ups, blah blah blah... FIDDLE with it. Think of it as some damn video game where you're trying to tune a car in Grand Theft Auto. This multiple-ways-to-execute will do you well on those days when something in TWS gets twerked and won't work the usual way for 24-72 hours, and then "Poof!" the issue disappears: if you have a backup method, you can handle it AND have your hair stay in place. )