Risk of selling todays out of money SPX puts -20%

Discussion in 'Options' started by FSU, Mar 9, 2020.

  1. FSU


    Don't know the answer to this even though I primarily trade SPX. If you are able to sell puts expiring today that are down 30% and the market closes if we are down 20%, you would think it is a safe trade. I realize there may be margin or clearing firm issues, but you would think its a safe trade.

    I don't plan on doing this but curious what others think.
    guru likes this.
  2. Should be, but is anything short really safe in this market? But then, I play it overly safe these days. Too old I guess...
  3. monkeyc


    It's safe if you sell only enough that you can't get margin called. If you're selling naked puts, then there's some risk that the market moves -19%, then you get margin called. The broker may cover at an unfavorable price before the options have a chance to expire worthless.