Keep in mind one of the benefits of doing an OTM BPS’ is that if they fail it takes a major technical breakdown in the stock for it to fall below your short strike.  When that happens and you have a bearish market like today, you can buy back those short strikes, and let your long puts run until you can sell them for the same price you bought back the short puts, which gives you the equivalent of full credit.  Definitely something to practice and learn, as it not being able to do it puts you at a disadvantage with these spreads.  I think MMM has a chance of still working, but you did the right thing by closing them if they weren’t at max loss yet
1 min read
Mark As Read
Share post
Like post