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Why You Should (almost) ALWAYS Close Short Options BEFORE Expiration

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Scott Reese // Trading, Investing, & Finance

When it comes to any type of options trading strategy that involves selling options (debit spreads, credit spreads, iron condors, covered calls, short puts, short strangles, etc.), there is always the concern of potentially holding these trades through expiration. If you do so, it does eliminate wasting money from purchasing back your short contracts, thus allowing you to keep the full premium. However, as I will show you in this video, in the majority of situations this is NOT worth the risk! There is actually a subtle but significant problem with holding short options through expiration that could potentially lead to substantial losses!

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Introduction to Options: https://skl.sh/32z1x6f
Options Trading Strategies: https://skl.sh/2PVmouS
Options Trading Mechanics: https://skl.sh/2xwk1co
ThinkOrSwim Tutorial: https://skl.sh/3gz4CtD
Beginner's Guide to Stock Market Speculation: https://skl.sh/3h2Fdub
How To Invest In The Stock Market Using Options: https://skl.sh/2Qf67nK
The Power of Selling Naked Options: https://skl.sh/3a03JI0
How To Properly Track Your Trades: https://skl.sh/2R4NNi7
Understanding Stock Market Behavior: https://skl.sh/3hjEthu
How to Become a Profitable Trader: https://skl.sh/3nEUuCP
Covered Call & Covered Put Strategies: https://skl.sh/3nMqKTV
A Statistical Approach to Day Trading (Scalping): https://skl.sh/3pDFwNw
Beginner's Guide to Stock Market Investing: https://skl.sh/3p56f6p
The All Seasons Strategy: https://skl.sh/3bh7RSG
The Power of Stock Market Diversification: https://skl.sh/3b6cMqL

Chapters:
0:00 Introduction
1:17 Detailed Look At Option Expiration
2:44 The BIG PROBLEM With Holding Through Expiration
3:12 Example #1 (Typical Scenario)
6:16 Example #2 (Worst Case Scenario)
7:48 Conclusion & Exceptions

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posted by derrikwk