You sold a put for $200 and it is now worth $100. You are up $100 with three weeks left. Do you take it, or hold for the other $100?

The instinctive answer is to hold — the remaining $100 is “free” if the stock behaves. The arithmetic says otherwise, and the reason is not about probability. It is about what the capital is doing while you wait.

Why half the profit in a third of the time wins

The first half of a premium sale is earned much faster than the second. Time value decays roughly with the square root of time remaining, so a 45-day position typically reaches half its maximum profit somewhere around day 15 — a third of the way through.

Look at that carefully — closing at 50% and holding to expiry produce the sameannualised figure in this example, and closing at 75% is worse than both. The middle of the position's life is its least efficient stretch.

The tie-break is what happens next. Closing at day 15 frees $9,500 to open another trade, and you get three cycles in the time one would have taken. Holding gives you one.

The stronger argument is risk, not return

The annualised comparison is close enough to be arguable. The risk comparison is not.

In that last stretch you are holding the position through its highest gamma period, when a small stock move rewrites your delta fastest, in exchange for the smallest remaining reward. You are risking $9,500 of collateral to collect a final $50.

Put it as a standalone trade: would you open a position risking $9,500 to make $50 over ten days? Nobody would. But holding a winner to expiration is exactly that trade, and it does not become sensible because you are already in it.

Losers need a rule made in advance

Winners are the pleasant half. The harder discipline is deciding, before you open, what turns a position from “fine” into “act”.

Common triggers, each with a real rationale:

• The short strike is breached. The stock has reached the price you said you would buy at. Either take assignment — which is the plan working — or roll.
• The loss reaches a multiple of the credit. Twice the credit received is a common line. It is arbitrary, and having an arbitrary line beats having none.
• Delta has doubled. A 0.16 delta put now at 0.35 is no longer the position you sized for.
• The thesis changed. If you would not open this trade today on this company, holding it is a decision you are making by default.

On a cash-secured put, losing is not the same as failing

Worth restating because it separates this strategy from every other one in the course. If you sold a put on a stock you genuinely wanted at that price, assignment is the plan, not the failure state.

The management question is only whether your view has changed. If you still want the shares, take them and start selling covered calls. If the company's situation has genuinely deteriorated, close and accept the loss — rolling a broken thesis just commits more time to it.

What can go wrong

Closing early and sitting in cash. The whole argument collapses without redeployment.

Holding winners for the last few dollars. Worst risk-per-dollar in the strategy.

Having no loss rule. Decisions made while losing money are worse than decisions made in advance.

Applying a 50% rule mechanically to spreads. Defined-risk positions have a different profit trajectory; the principle transfers, the specific number does not.