Selling Puts

This is a discussion on Selling Puts within the First Steps forums, part of the Reception category; If I sell a put to open a transaction, what would be my different scenarios for closing this transaction?...

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Old Aug 4, 2008, 4:15pm   #1
 
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Selling Puts

If I sell a put to open a transaction, what would be my different scenarios for closing this transaction?
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Old Aug 4, 2008, 4:52pm   #2
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Either to have the option exercised by the purchaser of it (meaning putting the stock to you at the strike price) or buying the option in the market to offset the one you've sold.

Or to let it expire worthless if it's out of the money at expiry.
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Old Aug 4, 2008, 5:52pm   #3
 
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tonype started this thread
Quote:
Originally Posted by Rhody Trader View Post
Either to have the option exercised by the purchaser of it (meaning putting the stock to you at the strike price) or buying the option in the market to offset the one you've sold.

Or to let it expire worthless if it's out of the money at expiry.
ok Thank you, and if I wanted to buy the option in the market to offset the one I've sold, would I want to pay more or less than what I paid to sell to open?
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Old Aug 4, 2008, 6:07pm   #4
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Depends on whether the underlying has fallen or risen, how much time has passed, and whether the market is pricing in more or less volatility moving forward.
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