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Price Exceeds Strike-Difference Error

The price exceeds strike-difference error protects you from overpaying when you manually close a spread position.

The 'price exceeds strike-difference' error occurs when you attempt 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.

Prices exceeds strike-difference error

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.

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Author
Kirk Du Plessis
Founder
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