Hi all!
I would like to get your perspective on how to manage a position such as a bull put credit spread when the underlying’s price goes against me. Below are a few questions:
1. Is a wider spread better for position management? For instance, is a $50-wide spread better than a $5-wide spread if both have the same position size/max loss?
2. How would you generally manage the position if the price falls below the strike of the short put but remains above the strike of the long put? Would you set a predefined loss limit and close the position? Would you roll it out to a later expiration? If so, would you roll the entire spread or only the short put?
I’m interested in your thoughts on risk management once the underlying starts trading inside the spread.
Thanks!