Disclaimer: F&O Learner
- If a PUT on the index(not stock) goes ITM, and we roll it OUT to next expiry (same strike), and then it goes deep ITM and we still roll OUT (same strike). So what?!
We collect premiums and there is a breakeven in each expiry before the losses happen (and for a month or two or three, the breakeven could be consistently breached) and the index will eventually come around, at which point all our historical premiums will effectively count. What am I missing?!
I realize that along the way, any losses are realized (pun), but its just a matter of time (or is it?).
I suppose the danger is the big moves: a big down move in an expiry followed by a big upmove to get above your strike in another expiry, wherein your net premiums may not be enough to offset the realized losses.
Nifty 15000 PE for June 24 is trading at 654.