The 'price exceeds strike-difference' error may be sent by the broker if the bot attempts to close a credit spread position with a price that is greater than the spread’s width.
For example, if you have a $5 wide short put spread and send a limit oder through Option Alpha to close the position for more than $5, you might receive an error message.
The close position order is rejected by the broker because credit spreads cannot exceed the strike difference.
Important: While all integrated brokers adhere to the rule of rejecting orders that exceed the spread's width, they may not all send a rejection error to the bot in Option Alpha.
The position remains open after you receive the error. This failsafe is in place to protect you from overpaying and taking a larger loss than necessary on a spread position.
Again, there is no guarantee it will trigger. We suggest using Exit Option settings and safeguards to control slippage and help mitigate pricing anomalies.
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