No. of Recommendations: 6
I remembered this thread after closing out my AXP and AMZN puts. In this short time the stock is up almost 10% making the original allure of a good entry price seem quite out of reach. I think this is just one of those typical option cases where you need to be OK with either case - getting a good entry price, or getting extra yield on your cash.
If one picked a high enough strike and they're still in the money, it could still work. The problem I find in this sort of situation is that you've made so much on a mark-to-market based on the puts that you wrote that there is a temptation to close them for a profit and hope to do it again on the next dip (if there is one!), meaning you don't get the good entry you originally wanted and [conditionally] planned on. Especially if they were high strike, since the current P/L is fantastic as the stock rises. Not much time value, but a big premium. It takes discipline to remember why you did them, and to wait it out.
Jim
