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REDDIT

Calendar spread for a credit.. unusual, but they are out there. Anyone else see them?

M
Feb 13, 2025 · 01:48

Every once in a while I come across a short term put on an underlying that has a bid higher than the ask of a longer term put of the same strike. When I try to execute them together for a credit it doesn't execute, much like the 'free butterflies' people try to do. But in this case, it's a marketable trade. Still, I can't send the trade with TT or IBKR.. I guess they see it as a phantom trade. Has anyone else seen this and have you taken advantage of it with good results? Thinking I will just need to leg in to try it out. It's not like the free butterfly myth, but rather someone desperate to get out of a position with a high bid sticking out like a sore thumb.

Edit: a couple of people are saying it makes no sense due to an efficient market, but this isn't always the case for farther otm options that are out of the spotlight. Even with wider spreads, sometimes a high bid or low ask appears. Looks like legging in might be the best way per u/consciousscreentime (thanks man) but if anyone knows of a system that supports executing these spreads as one spread for a credit, please let me know :)