Let me clear something up — I get this question all the time:
“Nate, how do I close a spread early? What if I want to lock in profit before expiration?”
Great question. And the truth is, it’s really simple once you know what to do.
A lot of folks assume that because I usually let my Income Machine trades run to expiration, that you have to do that.
Nope.
In fact, most of my other strategies use a pre-built “automated” exit with a limit order.
Letting a spread expire for the full value is great when it’s deep in the money and we’re going for max profit. But there are plenty of cases where you may want to take a win early, reduce risk, recycle that money into your next trade, or just move on.
The trick is knowing how to set it up the right way — before you’re staring at your broker screen in a panic.
Whether you’re using Thinkorswim, Robinhood, Tastytrade, or something else — the process is nearly the same.
Let’s say I’m holding a call debit spread. On Thinkorswim, I just right-click and select “Create Closing Order.” On other platforms, you might have to manually enter the legs, but you’re doing the same thing — flipping the BUY trade you opened into a closing sell order.
Now here’s the important part: don’t just take the market price. You want to set a limit order. If you opened the spread at $0.50 and you’re aiming to close it for $0.95, put that number in as a credit. You’re telling your broker, “Hey, I want to close this trade, but only if I can get this much back.”
Then — and this is key — change the time setting to GTC (Good ‘Til Canceled). This lets your exit order sit there until the market hits your price, even if that happens in two days or ten. Once you hit “send,” you’re done. The broker calls this a “working order” and it just sits in there working on your behalf. You don’t have to check on it or click any buttons to get out once it hits your desired value. Your exit plan is in place, emotion-free.
This is exactly how I manage most of my trades.
The strategy is designed to be low-stress and repeatable — and setting smart exits is a big part of that.
If a trade is up 60–70% in three days? I might take it early. If I’ve got ten trades stacked and want to free up capital? I’ll peel one off. If we’re heading into a risky earnings report? Same deal — I might exit ahead of time.
The beauty of spreads — and the Income Machine in particular — is that you’re in control. You don’t have to guess. You don’t have to react emotionally. You can pre-plan your exit, let the trade work, and move on.
Or you can even just let the trade ride for a max profit if it is in the clear which is my goal on most of them.
So next time you’re wondering how to close a spread the right way — now you know.
Use a limit. Choose the price you want.. Make it GTC. And let the system do the work.
— Nate Tucci
P.S. See setups like this and much more every weekday at 10am ET in the Opening Playbook. Don’t miss it!
