The Trade at a Glance
- Underlying Stock: NuScale Power Corp. ($SMR)
- Strategy: Roll Cash-Secured Put
- Old Expiration: February 28
- New Expiration: March 7
- Strike Price: $24.50
- Additional Premium Received: $40
- Total Premium Collected: Aggregated credit from rolling the position
- Margin Requirement: $2,450 (secured cash for 100 shares)
Why Roll This Position?
Income Enhancement
Rolling this put option captures an additional $40 in premium, increasing the total income from this trade.
Time Extension
Extending the expiration to March 7 gives more time for the stock price to stabilize or rise, while maintaining the same strike price.
Managing Risk and Flexibility
By rolling the option, we delay potential assignment and retain control over the position, adapting to market conditions.
Key Metrics Post-Roll
- Total Premium Collected: Initial premium + $40 additional credit
- Break-Even Price: Strike price minus total premium collected
- Risk: Obligation to buy 100 shares of $SMR at $24.50 if assigned
Next Steps
- Monitor the $SMR position and assess future rolling or closing opportunities based on price action.
- Consider early exit if the premium declines significantly.
Final Thoughts
Rolling options is a proactive strategy to increase premium income and manage risk. This $SMR roll adds additional credit while maintaining flexibility, creating an optimal balance between income generation and risk control.
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Disclaimer: This post is for educational purposes only. Past performance isn’t indicative of future results. Options trading carries significant risk.
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