Confusing loss on closing options spread
Confusing loss on closing options spread
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ginister · External communityPost link
External question — Personal Finance Stack Exchange
Author: ginister
Original post: https://money.stackexchange.com/questions/127551
License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/
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Today I closed a spread on $TSLA, specifically a 3x bull call expiring Aug 7th, 2020. The spread was composed of 2 legs as
:
Buy 1330 call
Sell 1360 call
My P&L on the trade before closing looked nice, roughly $800 or so profit as $TSLA had done very well the last couple of days, so I was happy to take this home. I settled the trade when the underlying was around $1400, so the P&L seemed reasonably accurate. When I placed the order to settle the spread with the mid price that IBKR supplied, the order was filled, but my P&L on the trade was a huge -$1400 or more! I am baffled as to how there was such a discrepancy before and after filling the order. Could somebody please advise what mistake I may have made when looking at my P&L and pricing the closing of the order?
For clarity, the 3 1360 calls were settled at 171.70 and the 3 1330 calls at 177.75.
Thanks for any help!
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