r/options
NEED ADVISE PLEASE! I am deep ITM
Trader seeks advice on rolling or cutting losses on deep ITM cash-secured puts for space stocks RDW and LUNR after a rocket explosion.
- The trader initially felt that these space stocks still had future opportunities despite recent setbacks.
- Rocket explosion caused significant losses on space stock positions.
- Deep ITM puts indicate strong downward momentum and bearish price action.
I am deep ITM with two CSPs taken during the Space Stocks run up. RDW MAY29 $21 for $0.29 prem. Rolled out/down to JUL10 $16 for net credit of $0.24. The other, LUNR MAY29 $41 P for $0.25 prem, rolled out/down to JUN18 $32 for net credit of $0.62. I should have closed after the rocket explosion, but felt that these two stocks still had opportunity. Now with post - SPCX , should I roll again for credit or take the net losses of -$466.67 and -$104.67 respectively. I have been running the wheel for 263 trades and doing pretty well. Thanks!
You’ve been running the wheel for 263 trades and you don’t have a plan for how to handle this type of situation? In the absence of a plan, just close the trades. And don’t do another trade until you have a plan.
Be greedy!!! You're deep in the money wait why sell?
Eat the loss > sell puts on tickers you want, set a stop loss.
If you’re resigned to take assignment and don’t mind tying up your capital, then keep rolling out and down until you don’t get credit, then take the stock at lower strike minus all the premium you collected, it’s a win win…nah never mind. Just do the first thing I wrote.
Take the assignment
Your situation is not unique
It really depends on your outlook on each stock. I reccomend checking out a vizualizer and seeing what it looks like and then chosing what aligns with your outlook.
Thanks, for your input!
Why not take assignment and sell CCs ?
This is one of my options, but I'm worried about recovering the LUNR shares from -$6.00 + when assigned. The RDW is down -$2.50 per share, but I have until JUL10.
These space stocks are super volatile, I wouldn’t worry too much about it not recovering. Im in a similar boat with RKLB. Sold $124P expiring today. Going to let it get assigned and sell CCs at my breakeven price .