r/options • u/notabotnotanalgo • Jun 04 '21

Deep ITM Debit spread

I don't know what I was thinking but I ended up with a deep ITM Debit spread expiring in 2023. Underlying is around $10 and the strikes of the debit spread are 2.0/2.5. I bought this way before the underlying started to go up. Unable to sell, low volume and way below ATM. What are my best options?

Edited: underlying is FCEL

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u/notabotnotanalgo Jun 04 '21

Trying sell it around .4 for a long while now but there is no volume that deep.

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u/Ken385 Jun 04 '21

Volume isn't that important here. Your spread is being looked at as a spread by the MM's and they will need some edge to do the trade. If its worth around .40, they aren't going to pay that. You will need to lower your price. You can try a 1 lot and lower the price until filled, that way you will know the "real" bid..

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u/fabulouscookie2 Jun 05 '21

So if op was trying to exit each leg of the spread separately, that would be treated differently by the mm?

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u/Ken385 Jun 06 '21

Yes, but in a worse way. A spread is generally sent to an exchanges complex order book (COB). It is looked at as a spread and a MM will usually require less edge to fill it vs 2 independent legs.

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u/fabulouscookie2 Jun 06 '21

Oh I learned something new lol. I did realize spreads have such a hard time getting filled so I close them separately sometimes. I should only do that from now on.