The Traderszone Network

Published in TZ Latest News 8 September, 2017 by The TZ Newswire Staff

Vertical Spread Max Loss Question

Hi Guys, a quick question about vertical spreads. From my understanding, in a vertical put spread(credit spread), the maximum loss is reached when price falls below the lower strike price.

If price gets to the lower strike price and below , well before expiration, does the position get closed automatically, or will it be left open till expiration,( which would present a chance that price might drift back above the higher strike price and into profitability).

Thank you for your time.