The 'price exceeds strike-difference' error is sent by TD Ameritrade 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 will receive an error message.
The close position order is rejected by the broker because credit spreads cannot exceed the strike difference.
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.
This error is only thrown by TD Ameritrade and there's no guarantee it will trigger. We suggest using Exit Option settings and safeguards to control slippage and pricing anamolies.
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