$SIG ShortPuts #FallingKnife – today I covered some short July 60.0 Puts at a 1.10 that I originally sold for 1.90 and 2.00 in January.
Despite the fact that it is out of the money 3 points with 4 weeks to go, in late May the stock collapsed to 46.09 before gaining most of it back recently.
I decided I don’t need the added risk in this name because I am still short July 50/55 Puts, October 45 Puts and Jan 45/40/35 Puts that are nicely profitable.
One of my unwritten rules is that if Puts that I sold for 2 bucks rises to 13 or 14 dollars and then give me a chance to get out ahead, I take it, and don’t look back.
I would have taken the stock if it had stayed down. The current move in this SP500 name shows why that would have worked too.