My cash-secured put is down 117%. Here's why I'm not closing it.

"My cash-secured put is sitting on a -117% loss now. Shall I close it and cut loss?"

I get this question often enough that it deserves a proper answer. So let me walk you through how I think about it — using a live trade of my own on AMD.

That's where my AMD cash-secured put sits right now: a 117% unrealised loss, because AMD has pulled back from $500 to $471 over the past two weeks.

And I'm not worried. Here's why.

1. I'm not trading. I'm getting paid to wait.

I'm not a day trader or a high-frequency trader. Yes, I run 30–45 day trades to generate income — but options are a complement to my long-term investing, not a replacement for it.

What got me into options in the first place was being tired of watching my capital sit idle, waiting for a pullback to buy into high-quality businesses.

Take AMD. I see a company with strong fundamentals and one of the clearest beneficiaries of the AI buildout. But instead of chasing the share price at the top of its $500–580 range, I sold a cash-secured put at the $430 strike — about 14% below the price at the time.

Which means I am prepared and willing to buy 100 shares of AMD at $430 if it trades below that by 18 Sep 2026. If it doesn't, I keep the premium.

That decision was made before I entered the trade. Nothing that has happened since has changed it.

2. That -117% is smaller than it looks.

Here's the part most people miss: the percentage on your broker screen is measured against the premium you collected, not against the capital you put up.

The premium on a trade like this might be a few hundred dollars ($570). If it now costs a bit more than double ($1,235) to buy the position back, your broker says -117%.

And it's unrealised. AMD fell from $500 to $471, so the market now prices assignment as more likely, so the option costs more to close. That's it. The loss only becomes real and permanent the moment you choose to close the trade.

3. Nothing in my plan has actually broken.

AMD is at $471. My strike is $430. The stock is still trading above it.

• Above $430 at expiry: no assignment, I keep the full premium.
• Below $430: I buy 100 shares of a business I wanted to own, at a price I chose, with cash I'd already set aside.

Both outcomes were acceptable to me on day one.

So the right move is usually the boring one: sit tight, ride the volatility, let it expire. Taking action because of an ugly unrealised number is one of the most expensive habits in the long run.

4. This is not "never cut losses"

To be clear — sometimes you should close early and decisively. When the fundamentals change. When the thesis you bought into no longer holds. When the reason you sold the put has stopped being true.

But "the price moved against me" is not a change in fundamentals. It's just price.

The real lesson

80% of risk management happens before you enter the trade, not after.

Do the work upfront — understand the business, pick a strike you'd genuinely be happy to own at, size it so assignment is a good day and not a disaster — and then follow the plan.

Because once you're in the trade, all you have left is your temperament.

Follow the plan.

Keep growing!