When should the goal be to expire worthless?

[migreen06]

Under what circumstances would it be beneficial to let an option reach expiration, expiring worthless?

 

[Overnight]

Under what circumstances would it be beneficial to let an option reach expiration, expiring worthless?

When you sell a call ATM and the price of the underlying plummets, or your sell a ATM put and the price of the underlying skyrockets?

Do I win a cookie?

 

[nooby_mcnoob]

There are no females on the internet. Please do not try and mock us virgins.

 

[smallfil]

Under what circumstances would it be beneficial to let an option reach expiration, expiring worthless?

The only time it is beneficial to let an option expire worthless is if you sold the option. So, you stand to collect the cost of the premium. On the flip side, the option buyer needs to minimize losses so, he should sell the option and close the trade if he has lost 50% or more of the premium. Saving that capital will enable him to minimize his losses and conserve his capital for other trades that might work out in his favor.

 

[xandman]

If you sold it short. Can't make money on the long side that way.

 

[bln]

It depends on your strategy's design. If the trades are fire-and-forget and zero-maintenance, one just leave them on the book to take care of it self. No monitoring or management needed.

If the strategy's blueprint is to exit, roll or manage legs in advance then do that.

 

[newwurldmn]

Under what circumstances would it be beneficial to let an option reach expiration, expiring worthless?

when it’s a hedge.

 

[KINGOFSHORTS]

when it’s a hedge.

yeah thats the only time I do as well.

 

[migreen06]

There are no females on the internet. Please do not try and mock us virgins.

What is that supposed to mean?

 

[migreen06]

What about in the case of a put?