Would you close this DOTM short put?

[IV_Trader]

spin , true , I would of close this trade too. I just made a point that at the time of exit r/r is not at 9:1 ( than why not to reverse it ?)

 

[a529612]

Quote from daddy'sboy:

Paper profit? This is a paper trade?
If you really want to hang on until the bitter end then at least buy the lower/higher strike put to make yourself a spread and lock in most of your profit. Otherwise take the advice already proffered.
One more thing. A naked short put is a very high risk strategy and you're now risking having substantial losses for a tiny ($40) profit. I get the impression, from your posts, you like these high risk/low reward scenarios. May I humbly suggest that you ask yourself why you have that mindset - it may cost you dearly in the future.
Cheers
db

Paper profit means unrealized profit.

It's not a naked put. More like a cash secured short put. I have the cash to buy the stock if the position really goes against me.

Anyway, I closed the position at 0.4 and locked in a $6k profit. I'm rolling forward to the AAPL Nov 150 Put.

 

[commiebat]

Quote from a529612:

It's not a naked put. More like a cash secured short put. I have the cash to buy the stock if the position really goes against me.

A cash-secured put is a naked put. Cash or margin don't "cover" puts, because they don't limit the loss. The term "secured" only refers to your ability to take assignment without getting a margin call. You can only cover a put by having an offsetting equity or option position in the same security, such as a calendar or a spread.

Anyway, I closed the position at 0.4 and locked in a $6k profit.

Good for you. That was the smart trade.

 

[spindr0]

Hey IV. The risk/reward may not be 9:1 but a noob often finds a way to give back a chunk of a naked write's profit

 

[Cutten]

Quote from a529612:

Short AAPL Oct 150 Put @ 4.4. Now it's worth only 0.4. So I have 4 pts of paper profit. Would you close this position and roll forward to Nov 150 Put or hold it till it expires worthless for 0.4? Thanks!

Always close once the premium gets this negligible.

 

[spindr0]

It's not a naked put. More like a cash secured short put. I have the cash to buy the stock if the position really goes against me.

To be covered (for margin purposes) you'd need to be short the stock or own a put with the same expiration or longer/same strike or higher. Otherwise, you have to put up margin.

In your case, tho you have the cash, you are not protected against loss. That's why it's called a "naked" put.