@Danette Think about legging out like this – say you have a 305/300 BPS – when you got it you received a $2.10 credit for selling the 305 Puts and spent $1.10 for the 300 long Puts, and now it’s in trouble – with 4 days left the stock is at 302, it’s broken through major support levels and dropping. You can either A) close the spread for a loss, B) hold on to it and see if it turns around or C) Leg Out. If you leg out, the stock has to be Relatively Weak (which it most likely is given that it broke support) and the market needs to be weak as well.
September 27, 2022
Mini Lessons October 5, 2022