A common question that I get asked with my options strategy is why I don’t just let my puts get assigned if they are in the money. One thing that can be done when a put is in the money at expiration is to let the put get assigned and then sell calls on the shares at the price you purchased the shares for. My preference is to roll the puts rather than let the put get assigned. My reason for this is that it gives me the opportunity to roll the strike down so that if I do get assigned I get assigned at a lower share price. This makes managing the calls easier. That way if the share price doesn’t recover very quickly I don’t end up holding the shares at a higher break even price for a long period of time. This does happen in some occasions, but I try and avoid it if possible.

For example, in one of my other accounts I got assigned on NMAX shares at a share price of $17 a share several weeks ago. I have been selling calls on the shares, but at this point NMAX isn’t making a price recovery very quickly. I also had some puts that I originally sold with a $15 strike price on NMAX, but since then I’ve been rolling the strike down as the expiration date nears. At this point I’ve been able to get the strike price rolled down to $12.50 and my goal is to keep rolling it down in strike price over time until it ends up being able to expire. Sometimes this process can take quite some time, but the closer my strike gets to the share price the easier it is to roll and of course make a higher premium amount. Here is a list of my trades for this process:

• 6/9 – Sold NMAX 6/20 $15 strike puts for $1.10
• 6/18 – Rolled above put to 7/25 expiration and rolled down to a $14 strike price and collected a premium of $0.30
• 7/25 – Rolled above position to 8/1 expiration to the $14 strike price and collected a premium of $0.36
• 7/29 – Rolled above position to 8/15 expiration and rolled down to a $13.50 strike price and collected a premium of $0.15
• 8/11 – Rolled above position to 10/17 expiration and rolled down to a $12.50 strike price and collected a premium of $0.35

So at this point I’ve collected $2.26 per share in premiums and have been able to bring my strike price down to $12.50. So my hope is that by the time the 10/17 expiration date rolls around the share price will have come up above my $12.50 strike price so the put can expire. If not, I’ll continue to roll it if possible.

Week 16 Results

Here are the positions I started the week out with:

On Monday I didn’t end up rolling anything as I wanted to wait to see how the week went. My put for ACHR was still out of the money and my SERV put was in the money, but I figured I’d give it a couple of days to see what happened with the share price. I did open a new position though by selling a put on a RUN with a strike price of $11 and an expiration date of 8/22 (11 DTE). For this trade I was able to collect a premium of $79.

By Wednesday the share price of SERV wasn’t really recovering so I rolled it out 3 weeks to 9/5 and rolled the strike price down to $11. I only collected a premium of $6 for this roll, but at least it got my strike price closer to the current share price with the hopes that the share price will rise over the next three weeks.

By Friday the share price of ACHR had come down some, but was still above my strike price so I was able to let my ACHR put expire.

Summary

So for the week I was able to collect $84.88 in net premiums. My target for week 16 is $77.72. So for the first 16 weeks I have collected a total of $1,288.04. My target for the first 16 weeks is $1,180.77 in net premiums. At the end of week 16 I’m using $2,900 of the cash in my account as collateral for my open put positions. Here is a list of the trades I’ve made since the beginning of July:

One thing I’m going to be working on with my current positions is to see if I can roll TMC down in strike price. With as far as the share price has dropped I might have to go further out in time than normal. The share price of TMC ended the week at $4.92. This is one of the difficulties that I sometimes run into with lower priced tickers. To roll down from $7 to $6.50 is a drop of about 7.14%. When you compare this to a ticker where you’re dropping your strike price from $20 to $19.50 it’s only a 2.5% drop so it is most of the time easier to make this roll down than it is on a lower priced ticker.

Read: How to Generate Consistent Profits Through Options Trading