Under what put circumstance would you sell to close (sell) an option position?

Answer 1

Sorry your wording seems a little off. I will try a question.
Under what circumstances would the holder of a put option close his position?
When the stock is below the strike price (the holder is in the money) and the holder does not think the stock will go any lower during the option period.

Answer 2

If you bought to open a put position and the underlying's price moved in your favor (down in the case of a put), you would want to sell to close prior to expiration to capitalize on the profit and avoid having to deliver the actual underlying.

This is basic option stuff you should master before trading, otherwise your pockets will get picked clean in that market.

Answer 3

Ditto on the wording. Let's try a different question.

If you were short a put option (a naked put), you could sell stock against that put (how much depends on the Greeks - delta, etc.), thereby covering the put. You'd basically be playing the spread at that point.

Answer 4

When the price of the option is higher than the purchase price, but not expected to go any higher.

I'm not sure what the other two answerers are speaking of, because they are making the question far more difficult than it is.

Good Luck,
Dana B.

Answer 5

You did not say what variety of settlement you're remaining, positioned or call. "sell to close" is one thank you to end an thoughts transaction. any different way is to obtain, or flow out the inventory itself. this way frequently happens at determination expiration. so which you may sell to close in case you prefer out of the settlement earlier it expires and you do not prefer to paintings with the underlying inventory.