Post by yello62 on Jun 10, 2013 8:50:40 GMT
i have a question for the more seasoned amongst us about being exercised.
i have two jun13 credit spreads that are way in the money. i was looking to roll to give the underlyings more time to come back to me but i would end up paying for the duration, which i understand is generally considered a no-no. when looking at the cost to extend duration versus letting the positions go to expiration, i know both sides will be exercised, which leads to a few questions.
1) will i be charged the exercise fee for both sides or, since this is a vertical and technically considered one position, will there only be one exercise fee? i asked my tdameritrade rep and he was not certain.
2). if extending duration gives me an opportunity to not have to pay the exercise fees, which increase the loss significantly for me, even if it is only one fee for the spread, why not pay a small amount to give the position more time, even if all i get out of this is a scratch?
thanks for any and all feedback.
tony
i have two jun13 credit spreads that are way in the money. i was looking to roll to give the underlyings more time to come back to me but i would end up paying for the duration, which i understand is generally considered a no-no. when looking at the cost to extend duration versus letting the positions go to expiration, i know both sides will be exercised, which leads to a few questions.
1) will i be charged the exercise fee for both sides or, since this is a vertical and technically considered one position, will there only be one exercise fee? i asked my tdameritrade rep and he was not certain.
2). if extending duration gives me an opportunity to not have to pay the exercise fees, which increase the loss significantly for me, even if it is only one fee for the spread, why not pay a small amount to give the position more time, even if all i get out of this is a scratch?
thanks for any and all feedback.
tony
