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The Trade at a Glance
- Account Size: $5K
- Underlying Stock: SMR ($SMR)
- Strategy: Rolling a Cash-Secured Put
- Action: Roll 1 March 21 $25 Put to May 21 $24 Put
- Credit Received: $30
Why This Trade Makes Sense
Extending the Trade for Additional Credit
By rolling this put option, we collect an extra $30 in premium, reducing our overall risk while staying in the trade.
Lowering the Strike Price
Moving from a $25 strike to $24 improves our potential assignment price, giving us a better entry if exercised.
Capital Efficiency
For a $5K account, rolling allows us to maintain flexibility while continuing to generate income.
Risk Management
- Max Loss: If SMR declines significantly, we may still be assigned shares at $24, but our premium collection helps lower the break-even point.
- Next Steps: Monitor SMR’s price action and adjust the trade if necessary.
Final Thoughts
Rolling cash-secured puts is a proactive strategy to manage risk and generate consistent premium income. This trade keeps capital engaged while maintaining a disciplined approach.
📩 Stay tuned for more trade updates!
#OptionSelling #OptionCredits #CashSecuredPut #IncomeStrategy #SmallAccountTrading