Box Spread

Discussion in 'Options' started by Herkfsu, Dec 20, 2017.

  1. spindr0

    spindr0

    Had you said that initially, there would have been no confusion.

    Yes, but you have to click either BUY or SELL when you take a position. So what do you have to do on your platform get that $11 credit? BUY or SELL the combo?

    Yes, 50 cents equals a half dollar but buying the box does not equal selling it.

    I'm not picking on you. As Robert said, if you ask for help and you use the wrong terms, it leads to a lot of wasted time and effort. There's nothing wrong with not knowing the correct terms when you're learning. Now you know what they are and future conversations about this will be more efficient for both parties.
     
    #11     Dec 21, 2017
    Herkfsu likes this.
  2. Theoretical profit from a box trade rarely equates to real life for the retail trader. Highly doubt you will be able to sell that box for $11 because who in their right mind would pay $11 for a $10 box unless you legged into it under rare conditions.
     
    #12     Dec 21, 2017
    jerseyjim likes this.
  3. FSU

    FSU

    Riot is a very hard to borrow stock, short sale restricted. If you sell a box here you may be short the a call that will be assigned. You will then have short stock that they may not be able to locate. At best you will be forced to buy short stock in, at worst you will be forced to by it on the cash market for a premium. This is one of the reasons a box trades above where it normally would.
     
    #13     Dec 21, 2017
    TradingDemystified likes this.
  4. FSU

    FSU

    To add, even if you are able to keep the short stock, you will pay a lot for it as it is so hard to borrow. This will eat up any profit you made selling the box over 10
     
    #14     Dec 21, 2017
  5. jerseyjim

    jerseyjim

    To buy something for -$10 is the same as selling it for $10. That is how IB handles it.
     
    #15     Mar 25, 2018