If you have a small account, selling for option premium is dumb. Risking thousands to make a few hundred dollars? Sure the win rate is high but, it takes only one losing trade to lose a lot of monies. As an options buyer, my risk is limited to the cost of the premium. Call options return is unlimited to the upside and limited on the downside to zero. Still, way better to risk a few hundred to make thousands.
I'm sure it is But often (nearly always) , expressions of loss seem to come from recent sign ups Rarely from veterans
Those who bought the $490 put options will get to sell their TSLA stock for $490 although, TSLA is only worth $445 now. Option sellers will pay the $45 difference as they are required to buy TSLA as $490 from the options buyer per their options contract. Of course, you get to keep the premium you collected from the option buyer to mitigate some of your loss.
Same as how you get out of a bad position. If you didn't have an exit plan, then just get out. If you had an exit plan, follow it.
Ride it out until expiration, It will probably expire worthless and you'll be in the money. I see TSLA above $500 by Friday!
He's already margined out, noway that his broker would have allowed him to open these positions without the cash to cover an exercise of the put, with that, it's the best strategy!
The losses just got bigger. Trend is down on TSLA. Why would you sell a put? Buying a put makes more sense.