Hi so two parts to this question - if I do a naked put option on an index, then a) should I gain more premium now by entering for a later month expiry as opposed to a near month expiry. Either way b) will I have a better chance of closing this put with 80% premiums collected if I get a later month expiry than a new month expiry?
Double-Edged Sword Later month expiry: More premium, but longer exposure to the market Near month expiry: Less exposure to the market, but less premium. Welcome to the World of Options.
OTM-Options answered this correctly. In addition, you can also increase your change on a profitable trade, by taking the later option, but at a lower (further OTM) strike price. You collect the same amount as the earlier option, but at a theoretically lower risk.