$5K Account: Rolling QBTS Mar 28 $8.5 Put to Apr 4 $8.5 Put for $35 Additional Credit

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An adjustment was made to an existing position in a $5,000 account by rolling one D-Wave Quantum Inc. (QBTS) March 28 $8.50 put to the April 4 $8.50 put, receiving an additional credit of $35.

Trade Details:

  • Underlying Asset: D-Wave Quantum Inc. (QBTS)
  • Trade Date: March 27, 2025
  • Original Position: Sold March 28, 2025, $8.50 Put
  • New Position: Sold April 4, 2025, $8.50 Put
  • Additional Credit Received: $35
  • Total Credit Collected: $80 ($45 from the original trade + $35 from rolling)
  • Account Size: $5,000

Rationale for Rolling:

Rolling this put option extends the trade by one week while collecting an additional premium, improving the breakeven point and increasing potential returns. The decision was based on:

  • Time Decay Considerations: The short put was approaching expiration but remained in play, making it beneficial to extend the trade while collecting more premium.
  • Stock Price Action: QBTS remained near the strike price, and implied volatility levels remained favorable for option selling.
  • Risk vs. Reward Adjustment: By rolling, the overall credit collected increased, providing a better margin of safety if assignment occurs.

Trade Outcome Scenarios:

  1. Stock Price Above $8.50 at April 4 Expiration: The put option expires worthless, and the full $80 credit is retained as profit.
  2. Stock Price Below $8.50 at Expiration: The position may be assigned, requiring the purchase of 100 shares at $8.50. Factoring in the $80 total premium, the effective purchase price would be $7.70 per share. We will keep rolling until it expires worthless.

Risk Management:

  • Capital Allocation: The potential assignment remains a key consideration in a small account, ensuring sufficient liquidity to cover the position if needed.
  • Exit Strategy: The trade will be monitored closely, with an option to roll further or close early if market conditions change.

Conclusion:

This roll exemplifies a proactive options management approach, enhancing credit collection while extending the position for a potentially better outcome.

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