When should the goal be to expire worthless?

Discussion in 'Options' started by migreen06, May 18, 2022.

  1. migreen06

    migreen06

    Under what circumstances would it be beneficial to let an option reach expiration, expiring worthless?
     
  2. Overnight

    Overnight

    When you sell a call ATM and the price of the underlying plummets, or your sell a ATM put and the price of the underlying skyrockets?

    Do I win a cookie?
     
    migreen06, TimtheEnchanter and ET180 like this.
  3. There are no females on the internet. Please do not try and mock us virgins.
     
    Collagen likes this.
  4. smallfil

    smallfil

    The only time it is beneficial to let an option expire worthless is if you sold the option. So, you stand to collect the cost of the premium. On the flip side, the option buyer needs to minimize losses so, he should sell the option and close the trade if he has lost 50% or more of the premium. Saving that capital will enable him to minimize his losses and conserve his capital for other trades that might work out in his favor.
     
    migreen06 and Eikfe like this.
  5. xandman

    xandman

    If you sold it short. Can't make money on the long side that way.
     
    migreen06 likes this.
  6. bln

    bln

    It depends on your strategy's design. If the trades are fire-and-forget and zero-maintenance, one just leave them on the book to take care of it self. No monitoring or management needed.

    If the strategy's blueprint is to exit, roll or manage legs in advance then do that.
     
    migreen06 likes this.
  7. newwurldmn

    newwurldmn

    when it’s a hedge.
     
    Nobert likes this.
  8. yeah thats the only time I do as well.
     
  9. migreen06

    migreen06

    What is that supposed to mean?
     
    cesfx likes this.
  10. migreen06

    migreen06

    What about in the case of a put?
     
    #10     May 26, 2022