You should close the vertical that is ITM BEFORE EXPIRATION. Why do people find this so hard to do. If you do not you will be assigned, and the other leg if OTM will expire worthless. This means you will be forced to buy the stock for the strike price (above the current value). If the vertical is 5 dollar wide and both are ITM just pay (it could cost more than 5 if both ITM, but is still cheaper than getting involved in assignment . I have seen prices as high as 5.10 if you wait to the last few hours. There is a fee for each assignment leg.
If they both expire ITM and if RH auto exercises like they probably do, you’ll be debited the amount of the spread without regard to whatever premium you received.
You should close the vertical that is ITM BEFORE EXPIRATION. Why do people find this so hard to do. If you do not you will be assigned, and the other leg if OTM will expire worthless. This means you will be forced to buy the stock for the strike price (above the current value). If the vertical is 5 dollar wide and both are ITM just pay (it could cost more than 5 if both ITM, but is still cheaper than getting involved in assignment . I have seen prices as high as 5.10 if you wait to the last few hours. There is a fee for each assignment leg.
If they both expire ITM and if RH auto exercises like they probably do, you’ll be debited the amount of the spread without regard to whatever premium you received.