my options spread should be in the profit but isnt. please explain why

[ftr]

hi. i entered a $440-450 bull call spread when the stock was in the 430s and now it is at 443 but im in the negative. i should be in the profit right? the 440 calls i longed are up 2.4/share but the 450 calls i shorted are up 2.5/share so im down $10/contract. i don't get it. can someone explain this to me? thank you.

 

[vince]

Hi ftr,

Option pricing inconsistencies do occur due to liquidity or rather lack of it. It appears that the 450 option is more liquid.

 

[ftr]

hi vince and thanks. i checked the volume and open interest and yes the $450 calls are higher on both accounts. but the delta on the $440 call is .596 and on the $450 call is .57 so the $440 call should move more per dollar change in the stock's price right? but the $450 call moved more and i don't get it.

if i want to exercise the long call can i exercise it and sell the underlying stock at market price all in one transaction? my point is i don't want to exercise a $440 call and then have to sell the stock at market price in a separate transaction only to find that in the time it took to fill the order to sell the stock, the price dropped below $440, you know what i mean?

thanks again for your message.

 

[vince]

ftr,

I can understand why you dont want to exercise. In that case your best bet is to let the spread expire. (in the assumption it remains itm)