Recently I took a position with NUE using a long call spread. I bought 2 contracts with a 60 strike and sold 2 contracts with a 65 strike to help reduce the cost. After 2 days the stock PPS went down and I was overjoyed at the time. The reason was the contracts I sold went down in value.

 This is what i wanted. I tried to buy the contracts back to keep the difference of what I originally sold them for. But I received an error message telling me to call in the order. I didn't follow through with the call. My question is this:

If I just pull up the option's contract symbol and buy those 2 calls I sold will my account reflect the 2 contract bought and the 2 contracts sold at the same strike price, thus cancelling each other? That would leave me with my 2 contracts with the 60 strike price. I thought it was a "no brainer" but see their may be a few snags in the way.

Boca_Bobby

I thought it was strange. Afterall I was trying to buy the contracts I sold leaving me just 2 call contracts that were left from hte original spread. I could have made a profit on my sold contracts and held for a later time to sell the other contracts for more profit.

 It just didn't work out that way.

Boca_Bobby

Thanks for the help k-man. Let's hope someone can help me understand it a little better.

Boca_Bobby

Boca Bobby,

Assuming you have enough funds in your account to buy the calls back, you should be able to leg out of the short side of your spread. Without checking your account, it is difficult to say why you received that message. Please calls us anytime you have a question like that. Sooner is always better. When on the weekends, please send an email and someone will respond promptly.

877-495-5464 or service@tradeking.com

--Nicole Wachs

TradeKing Staff

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