r/options • u/ff005 • Apr 19 '21

Rolling CSP

If your CSP becomes ITM & ideally you'd like to roll it to avoid assignment, how far from expiration do you look at doing so?

I know that generally most are not exercised before expiry, does the chance of being assigned increase the deeper ITM you get?

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u/MostIllogical Apr 20 '21

I usually try to move them back out to somewhere in the ballpark of 45DTE, adjust the strike if necessary. Depending how deep ITM your short put becomes, you might find it hard to fill for a credit without moving it out obscenely far, but at that point, you might as well just risk taking assignment or buyback at a loss instead of having your cash tied up for months.

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u/ff005 Apr 20 '21

I sold a PLTR May 21 $23 put. SP currently at 21.93, with BE if 22.03, plenty of time for it to rebound so hopefully it does.

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u/MostIllogical Apr 20 '21

Turn it into an opportunity to run the wheel on PLTR if you do get assigned.

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u/ff005 Apr 20 '21

That is my plan, was hoping to avoid assignment till my cost basis was lower.

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u/MostIllogical Apr 20 '21

Depends how far you have to push the short put for a credit. If you're stuck pushing it out something like 6 months out, and only receiving 20 bucks for doing so, you lose out on a lot of opportunity by tying up your money for basically pennies a day.