How To Rescue In The Money Naked Put Trade With Leap Options

Sep 8, 2015 | Intel Stock (INTC), Profit And Income Strategies, Stock Market Outlook

When markets begin to move lower, many investors who sell put options for income, find that their positions end up in the money. When that happens, many take losses to get out of positions or roll their options either lower or further out in time. Today’s question from an investor is in regards to his concern over having rolled naked puts as far out as January 2017. Let’s review his question and look at some answers.

Investor Questions – Rolling Into Leap Put Options

“Teddi; I have a lot of naked put positions and no cash left. Unlike you I don’t like to keep cash sitting on the sidelines earning next to nothing. With the correction or whatever this is, I have a ton of put options that I have rolled a few times. Now most are out to 2017. I am a bit worried what might happen if the market tanks big time. What should I have done or could have done differently or is there anything I can do now or whatever else you might think of. Not really sure how to explain this better. Hope you understand that I am rolling like mad, now out to 2017 and now worried it is a mistake. I am looking for some sage advice. I thought I would own these companies but now I am hesitant. – Andy”

Some Answers

When stocks collapse as they have done in this correction, often the only way to keep from being assigned shares once sold puts are in the money is………………the rest of this article is for USA Members.

This strategy discussion article on handling naked puts caught in a market correction is 1500 words in length and is for members only.

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Disclaimer: There are risks involved in all investment strategies and investors can and do lose capital. Trade at your own risk. Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed and presented are financial or trading advice or recommendations. Everything presented and discussed are the author’s own trade ideas and opinions which the author may or may not enter into. The author assumes no liability for topics, ideas, errors, omissions, content and external links and trades done or not done. The author may or may not enter the trades mentioned. Some positions in mentioned stocks may already be held or are being adjusted.