Big Oof

doctorpot1 : you could have did what I did here to roll your put to lower your cost basis and avoid assignment
https://www.moomoo.com/community/feed/107452442279942?data_ticket=5b3500b278c1b7aa4a176e85285988a1

HodlToMargin OP doctorpot1 : Thanks for the suggestion haha. I've actually thought of rolling out, but I'd have to roll at least one month out for credit, otherwise I'd be rolling for a debit. Though, with such a long DTE, it's quite inefficient, capital-wise, moreover, I'd have to BTC for at 100% of the premium in order to not be a debit, and with a profit target of 50%, I'd have to aim for 150%, instead of the original 50% of the premium, which is also why I've decided to just take assignment and not roll aggressively, since taking assignment is also part of the Wheel strategy. Surely, you could very well roll aggressively to collect more premium, until the point in which you could not roll for a credit, which in that case, you'd take assignment instead of BTC at a loss, but in my case, I prefer to just take assignment and sell weekly CCs @ 22, it's really just to get the wheel spinning haha.

doctorpot1 HodlToMargin OP : I had been observing and I realised that we can always roll at the same strike for a credit (1 week or 2 week out). but for CC the problem is when the price and the strike deviate too much, there won't be a buyer for the call. so I decided to keep rolling near expiry instead and keep earning that time value.

HodlToMargin OP doctorpot1 : From my observation, if there's a big dip,the short put will be ITM and its price will reach Mars before Elon Musk, and although the all other put contracts in the market will rise in value as well, but usually the 1 or 2 weeks put at the same strike will rarely rise enough to cover your short put, as such, now it's either to roll up or roll way out (so you're still trading time for money). If you have to roll way out, let's say a few months, you're better off taking assignment and just ride the wave. Though, I definitely agree with your second point, calls that are too OTM rarely have much liquidity, and when the stock drops harder than my grade, the calls at the strike price in which you get assigned may not have any buyers for the calls that you're trying to sell at all. Now, you're stuck bagholding a stock while collecting pennies or even non at all in premium. So, all in all, do wheel (combination of CSP and CC) only on quality stocks like MSFT, AAPL, and even ETFs, but that would require and tie up a shit load of capital. Cheaper stocks and worse meme stocks like AMC or even PLTR in a sense, are not really the best choice when it comes to wheeling.

doctorpot1 HodlToMargin OP : yea I think we disagree on point 1 hahahahahaha. I used more of theory to price it where option to roll near expiry will only have extrinsic value and 0 intrinsic value, but next week option will have extrinsic plus intrinsic value. thus there will always be credit. but yea the drawback is people may not buy the put also. many strategies that can be leveraged on but I'm glad to have a discussion on different strategies too :)

HodlToMargin OP doctorpot1 : Yup, that was a great discussion.

doctorpot1 doctorpot1 : opps I used the terms wrong way around. at near expiry there is only intrinsic value and 0 extrinsic (time) value and next week there will be both intrinsic and extrinsic (time) value. my bad

HodlToMargin OP doctorpot1 : Yup haha, no worries, I suppose, a good rule of thumb would be to manage your losers, in this case your ITM puts around 10~5 days left till expiration (in attempt to avoid early-assignment), which will mostly have intrinsic value with little extrinsic value left, but if you're rolling I suppose 1~2 weeks out at the same strike, which is still ITM, the intrinsic and extrinsic value will be very similar to your now ITM put that is also around 1 week or more till expiration. This is maybe why when I consider rolling to manage my losers, I'd have to roll a few weeks out. If let's say, you're managing your losers one day before expiration, I suppose rolling 1 or 2 weeks out at the same strike would in fact give you more premium as it has more extrinsic value. Though, to each his own, I guess, since not all manage their positions around 10~5 days left till expiration.