This is part two of a two-part video explaining the similarities and differences between selling IWM naked puts and bull puts on a monthly basis. Part one focused on IWM naked puts. This one focuses on IWM bull puts. The emphasis is on what to do when they move against you.

Notes

If using bull put spreads in lieu of naked puts for monthly cash flow trade where you MAINTAIN exposure… if/when stock drops to your short strike and/or pushes the bull put spread ITM. It’s dangerous to wait until expiration to roll. Rolling EARLY makes it easier to get the right credit on the next month.

Sell 35-day bull put

20 days later, stock has moved far against me, I have 15 days left.

One) You could let it ride and hope that in the next 15 days the stock rebounds and the put spread expires worthless. More aggressive

                Pro: You’ll recoup the loss and potentially make money in 15 days.

                Con: If the market doesn’t recover, you won’t be able to roll to the next month for a good price. It could make it so you’re unable to recoup all the loss in one month.

Two) You could roll NOW. More conservative

                Pro: You’ll be able to roll for even or slight debit/credit.

                Con: You’ll recoup the loss a little slower if the market recovers.

Legal Disclaimer

Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.

All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.