I'm bit new on Option Trading and want to ask your opinion/strategy on certain situation.
Say, the stock price is $110 and I sold a Put at a strike price $95 and expiry after 60days. After 3 or 4 days, if the stock price comes down to $100, the premium goes very high and exceeds my potential Stop Loss level (say 30% of the premium that I collected), even though there's a good chance that the stock won't reach strike price and the contract would expire worthless. but, before the Expiry date, my unrealized loss is very high already.
In such situation, what would you do? would you close the position considering it crosses the Stop Loss or wait for the chance of the contract to expire worthless?
Thank you in advance.