I have a multi-legged option/stock position. As part of it, I owned some ATM $90 ITM long calls that were at $4.20 x $4.70 with the stock at $86.20 . There's too much time premium remaining so exercising is a non starter. The $85 puts had a reasonable B/A spread so I decided to roll the $90 puts down. As the stock dropped, for an hour I tried to split the bid on a spread order. Most of the time they accommodate but not today. I eventually got a decent fill but the problem is that the stock could have reversed at any time and taken away some of the gain. So the question is, what were my alternatives? At the same time, the $90 call was $0.75 x $0.85 so at the market, the covered call had a potential profit of $4.55 so something in that vicinity should be a reasonable expectation for the sale of the put. But I couldn't get anywhere near it. Given the above, with an inability to get out of the $90 put, I could have sold the synthetic $90 covered call and bought the $85 puts, achieving my roll and then either buy a few more $85 puts or shorting some stock to balance the delta. Plan B would be to just KISS, leave everything alone and buy more shares to raise my delta back to my comfort level. I don't really want to tie up the cash but it's a choice. Are there any other reasonable solutions for dealing with such a wide B/A spread? TIA.
If you are with ToS one try is to call in and see if they can call in the order inside the b/a and see if they can market it?
OOPS!!!! BAD TYPO. My apologies and thanks for catching that. That's what happens when I multitask poorly As part of it, I owned some ATM $90 ITM long **PUTS** that were at $4.20 x $4.70 with the stock at $86.20 .
No, I'm not with ToS. If I was, if the LONG $90 put is $4.20 x $4.70 and I put an order to sell at $4.50 then how would calling in be any better? What would they be doing that would make the sale at $4.50 more likely?
I'd be pricing it on modeled value vs. mid--I can always get a fill within a few pennies of that. Also, you might have better luck closing at end of day (particularly if there was a lot of call selling or put buying today) because that's a pretty attractive position to any market maker sitting short shares into close.
I got filled at $4.50 on the $90 puts. Share price had risen a little but the B/A spread finally narrowed. I also have some long $87.50 puts to unload/roll but they're not cooperating with them either. There's less of a haircut with the synthetic so that may be my only choice. I'll see on Monday morning.
That's all fine and dandy if the MM is willing to cooperate near the midpoint but all morning it was no takers. Also, with a directional long put that is up $1.60 in the morning after being up about the same yesterday, I can't sit around waiting for a hungrier market maker at the end of the day because the stock could reverse and take some or all of the gain back back... hence the question about alternative ways to lock it in without the big haircut.