Help me to figure this out. The benefits and the loss.
Sell a covered put
exp: 16th january 2026 for 61.90 credit.
Buy a put
exp 1 Nov. 2024 at 6.58
With a total credit of 5532 and max loss up until Nov 1 2024 of $700.
As price goes up and gets closer to Nov.1 roll it to a new further out date spending another $600
Now you have coverage Nov. 1 2024 to Jan. 16th 2026 with a total credit of $4932. And can close the options at any point for a smaller profit as price goes higher.
What are the downfalls to this besides having money put to the side for covered put.
Would throwing in a purchase of a call option somewhere in there to pick up some gain from positive movement.
Just trying to get what you guys see is wrong that im not seeing.
Option help understanding a deep itm covered put
byu/stewiestewsternew inoptions
Posted by stewiestewsternew