The overlapping strikes failsafe prevents bots from opening a position that overlaps another position or splits a position apart. The error occurs if the new position is in the same bot or same brokerage account as the existing position.
An attempt to open a new position that overlaps the strike price of an existing position in the same bot (also known as āleg stompingā) triggers the overlapping strikes failsafe.
This failsafe will only occur if the option contracts have the same underlying symbol, strike price, and expiration date.
For example, āBot Aā has a SPY short put spread expiring March 17th with a $393 short put strike price and a $387 long put strike price.
If you try to open a new position in "Bot A" with an overlapping contract for either leg, you will receive an alert from your broker in the platform.
For example, you can't open a new SPY position with a March 17th $393 long put because the new order interferes with the existing open contract and the order would ācancel outā the existing $393 short put.
Only a deliberate closing order can close a position.
The failed position will display an error message stating that the broker would not execute the trade because it would close an existing position.
The error position occupies an active position spot in your bot and will count against your total and daily position limits. You must manually cancel the position to create space for more positions.
All bots within the Option Alpha platform operate independently. However, if two different bots are connected to the same brokerage account, the broker will alert you to the error.
For example, if āBot Bā tries to open a position with a March 17th $393 long put in the same brokerage account as "Bot A," the broker will reject the order and you will receive an in-app notification.
Although bots do not communicate with one another, the overlapping strikes failsafe prohibits the broker from executing the order because the positions are managed within the same brokerage account.
.png){kind=avatar}
