How to Roll Put Options (Buy to open)? (Bought to Open)

Question

I have a put option that I bought to open but the market has moved against me. So I'm looking for a way out of the contract other than taking a huge loss. I want to know my options for rolling them over.

Scenario: I bought a Put contract when price was at $33 expecting the price to reach $29 by contract expiration but the price is now at $37 and expiration is getting closer. So in short how can I save this losing Put option that was a buy to open?

I basically want to shrink my loss in this contract and or hold it until a later date because I still expect the market to move lower.

Answer 1

I have a put option that I bought to open but the market has moved against me. So I'm looking for a way out of the contract other than taking a huge loss. I want to know my options for rolling them over.

Rolling an option involves closing the current position and opening a new one. If you close the current open option, it becomes a realized gain or loss. So there is no "way out of the contract other than taking a huge loss".

I basically want to shrink my loss in this contract and or hold it until a later date because I still see that the market to move lower.

The only way for you to "shrink your loss in this contract" is to hold on and have the underlying drop enough by expiration so that your long put appreciates in value. If you close it, the loss will be realized and it goes into the books. Purchasing a second option is a new trade with the hope that at some point, your expectation of a market/security drop will come true.