# Spreads Strategy

> Turn a TradingView buy or sell alert into a vertical spread built from the live option chain: debit or credit, width, expiration, reversals and exits.

*Source: https://tradelabs.org/docs/tradingview/spreads*

A spreads strategy turns each alert into a two-leg vertical spread. You never type strikes. When the alert fires, TradeLabs reads the live option chain and builds the spread from your settings.

Spreads work on **Interactive Brokers**, **Tradier** and **Robinhood**.

## 1. Choose what each alert opens

- **Debit** spreads cost money up front. You can lose at most what you paid.
- **Credit** spreads pay you up front. You can lose at most the width minus what you collected.
- **Just close** makes that alert close the open spread and open nothing. Use it to trade one way only.

## 2. How the legs are picked

![The Spread settings of a TradingView strategy](/docs-assets/app-tv-spreads-spread-group.png)
*The ruler under the settings previews the legs each alert will open.*

## 3. Build the strategy

1. On **Strategies**, click **New strategy**.

2. Set **Name** to your alert's name, **Instrument** to **Spreads**, and pick IBKR, Tradier or Robinhood.

3. In **Signal source**, set **Source** to **TradingView**.

4. Under **Spread**, set **Buy alert opens** and **Sell alert opens**.

5. Set **Width** in strikes, **Spread expiration** in days, and **Strike position**.

6. Set **Entry limit price** to **Ask** to fill fast, **Mid** to split the difference, or **Bid** to wait for a better price.

7. Under **Risk management**, set a **Stop loss** and a **Take profit**.

![A TradingView spreads strategy in the editor](/docs-assets/app-tv-spreads-editor.png)
*Instrument Spreads, source TradingView.*

## 4. What each alert does

- **Reversals are automatic.** Holding a bullish spread when a sell alert arrives closes it first. The bearish spread opens only after the close fills.
- **No stacking.** A repeat alert does nothing while the spread is held, or while its entry is still waiting to fill.
- **Closes always go out.** Nothing blocks an alert from closing a spread you hold.

## Stops and targets

![Stop loss and take profit on a spreads strategy](/docs-assets/app-tv-risk.png)

**Stop loss** and **Take profit** are percentages of what the spread cost or paid. When one is hit, the whole spread closes. IBKR, Tradier and Robinhood all watch them for you. On IBKR they are measured from the price the spread actually filled at.

## Credit spreads on SPX overnight

![A credit spreads strategy for SPX](/docs-assets/app-tv-spreads-credit-group.png)

With **Allow extended hours** on, IBKR trades **SPX, SPXW, XSP, VIX** and **VIXW** spreads in Cboe's overnight session, Sunday 8:15 PM to Friday 9:25 AM Eastern. Stops and targets keep working overnight. Other tickers trade in regular hours only.

> **Heads up**
>
> Overnight option markets are wide. A tight stop can trigger soon after entry because the midpoint sits well away from the fill. Leave the stop room, or keep it for regular hours.

## What cannot be traded

- **Futures symbols** such as `ES1!` or `NQ1!`. Spreads are built from stock, ETF and index options.
- **Schwab.** It does not take TradingView options or spreads.

## Troubleshooting

| Activity shows | Why | Fix |
| --- | --- | --- |
| already holds a spread | The same side is still open | Nothing. Close it or wait for the opposite alert. |
| entry waiting to fill | The last entry has not filled yet | Nothing. It blocks the repeat. |
| can't read option chains | No broker on the strategy reads chains | Use IBKR, Tradier or Robinhood. |
| is a futures contract | The chart is a futures symbol | Chart the stock, ETF or index instead. |