I have an options algo that trades multiple BullPutSpreads simultaneously; opening & closing them at different times.
Sometimes an options contract may be used in multiple spreads --this seems to cause problems when opening or closing new positions
e.g. : consider these spreads, all bought on the same day, all expiring at the same time
# open bullPutSpreadA : sell [nvda $310 put] / buy [nvda $305 put]
# open bullPutSpreadB : sell [nvda $305 put] / buy [nvda $300 put]
# open bullPutSpreadC : sell [nvda $305 put] / buy [nvda $300 put]
note that each spread makes use of this contract [nvda $305 put] . Overall, we bought it once, and sold it twice.
Question 1: When we open bullPutSpreadB (selling that contract for the first time), will that sell position cancel out the initial buy position?
Question 2: What is the best way to liquidate this contract for ONLY one of the spreads?
eg: the next day, i want to close ONLY bullPutSpreadC (but not the other two)
# close bullPuSpreadC : liquidate [nvda $305 put] / liquidate [nvda $300 put]
When i do this, liquidating [nvda $305 put] seems to remove ALL holdings related to this, leaving the other 2 spreads with mismatched legs.
.ekz.
Following up here with answers to benefit others:
Derek Melchin
Hi .ekz.,
Thanks for providing the answers to the questions.
Best,
Derek Melchin
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.ekz.
The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by QuantConnect. In addition, the material offers no opinion with respect to the suitability of any security or specific investment. QuantConnect makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances. All investments involve risk, including loss of principal. You should consult with an investment professional before making any investment decisions.
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