MikeL 8:37 pm on Wednesday, December 2, 2020

It would be scary to be in this position.

I came across this video. Thought to share it here.

Lost $30,000 on a $1-Wide Credit Spread – TSLA (Options Traders MUST Watch This)

Sammy 5:52 am on Thursday, December 3, 2020

I have been following Jeff in his long IC SPX trades. Yesterday I called T.O.S. options desk to confirm what I suspected. SPX settles in cash thus my ITM 3635/3655 call spread (I had already STC the put side of the condor) would expire at the full profit possible (spread – debit paid).

While I did not watch the entire video, it appears the loss was due to the fact that TSLA is a stock and not an index. Also, his brokerage should have exercised the other half of the spread to prevent (limit) his loss.

What do you think?
- thomberg1201 8:00 am on Thursday, December 3, 2020
  
  I also don’t understand why the other other half of the spread didn’t provide protection.
  - geewhiz112 8:13 am on Thursday, December 3, 2020
    
    You should check with broker and see what their procedure is. I always assumed that Schwab automatically did this. They do but not sure when the transactions takes place
    - MikeL 10:07 am on Thursday, December 3, 2020
      
      The entire issue is that the broker had no responsibility for the long put, because there was no request to exercise the long put. It was simply too late to do anything.

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