Vertical Debit vs Credit spread???

[jacobogrady 0]

 

I have a question when using TOS for vertical spreads. So when trading AMAZON STOCK using a vertical call credit spread using writing 1912.5 strike and buying 1915 strike I take in a net credit of 1.40 with a max loss of 1.10 per contract.

While trading AMAZON STOCK using a vertical put debit spread using the same strikes of 1912.5 and 1915 it says max profit is 1.82 and max loss is 0.68.

 

This is very confusing because obviously they trades are the exact same but the debit spread gives me much better ratio. What am I missing because losing $68 only and gaining $182 max seems unrealistic.

 

[Yowster 7,974]

12 hours ago, jacobogrady said:

 

I have a question when using TOS for vertical spreads. So when trading AMAZON STOCK using a vertical call credit spread using writing 1912.5 strike and buying 1915 strike I take in a net credit of 1.40 with a max loss of 1.10 per contract.

While trading AMAZON STOCK using a vertical put debit spread using the same strikes of 1912.5 and 1915 it says max profit is 1.82 and max loss is 0.68.

 

This is very confusing because obviously they trades are the exact same but the debit spread gives me much better ratio. What am I missing because losing $68 only and gaining $182 max seems unrealistic.

 

This pricing assumes you'd get mid-point fills, and that's pretty unlikely.   I think this is merely a rounding error, actual fills for this trade would likely be very similar from risk/reward totals.   A few comments...

• When looking at EOD prices, be aware that the bid/ask spreads are typically wider than during the day, so this mid-point differential you see can likely be explained by these wider bid/ask spreads.
• AMZN is a $1900+ stock, so a 2.5 width spread represents a very small stock price move of one tenth of one percent.   So, a 2.5 width spread is going to behave a lot differently than a 2.5 width spread on a $100 stock.   In the case of AMZN, you'll like have to wait until very close to expiration to close the spread for a decent gain (or have the stock price make a large move).