sell to close or let it expire?

Hi guys,

I'm fairly new at this...I bought (paper money) 10 SPX debit call spreads contracts. Today's they're in the money, but will be expire tomorrow. Do I need to sell them OR just let them expire?

In the past, I know when I SOLD contracts, I sometimes let them expire to realize the full return and not pay commission, but this time, I bought the vertical spread contracts (sold 10 and bought 10), so I'm a bit confused, as to what I should do to realize the MAX profit?

Thanks!

SPX = cash settled

Hi oprookie,

Welcome to T2W and to the fantastic Options Trading Game!

SPX Options are cash settled - so really no need to do anything w the ITM debit call vertical spread.

Just be sure you know how much your broker will charge for ITM settlement and also assignment fees.

Good trading to you.

WklyOptions

Thank you sir. i called broker and they said I MUST sell these positions, otherwise I will get NOTHING! So bow I'm REALLY confused!

Broker clarification

Hi oprookie,

What broker is saying is that you should exit via selling b/c SPX may move away from Profit zone. And that is true.

My comments were meant to answer the scenario where spread held to Expiry and remaining In The Money (ITM).

If you did nothing into Expiry and spread ITM, no need to do anything as it will self-cancel.

Hope this is more clear.

If you want to lock up Profit, best Exit early before Expiry unless already deeply ITM.

Thank you.

WklyOptions

Thanks again! It was TDA. However, I did call their trade desk again and another person said that I could let it explore (since it's just a paper trading account), but he explained that in a LIVE account, it's better if I closed the positions, b/c if both legs of the spread are in ITM, they will be exercised and that TDA charges $19.99 fee for exercising ea leg, which could add up to be more $$ than closing those ITM positions. He also said to further save of fees, I could close only the long leg and let the short one expire!!!