What do I do with my expiring put credit spread?

My put credit spread trade is getting close to expiration. What should I be doing?

If the put credit spread is out-of-the-money — both strike prices are below the stock price

If your put credit spread trade remains out-of-the-money at expiration, do nothing. This is the happy ending! Both options will expire worthless, and you’ll keep your original credit for maximum profit. Your broker likely won’t notify you, but they will remove the options from your open positions and the premium you received up front is yours to keep. Jim will not send a Trade Alert because there’s no action that needs to be taken. Your best indicator that the trade has successfully completed will be all the celebratory comments from your fellow traders in Stock Talk.

If the put credit spread is in-the-money — the stock price is below the strike price(s)

When your trade is new (more than three weeks before expiration), you can almost certainly shrug off normal dips in the stock price. There is a very small “black swan” possibility that a new trade could be subject to assignment, so if you want to read more about that now you can at
I got assigned–what do I do now? But most OFI members hardly look at their trades earlier than three weeks before expiration.

If either or both legs of your put credit spread is in-the-money as you near expiration, you may need to take action to avoid assignment. Here’s your plan:

Stay calm. 35% of OFI’s trades go through this and it’s a normal component of Jim’s 82% win rate.
Watch the Stock Talk commentary regarding this trade. You’ll see that the experienced members face this situation regularly and are not anxious. Resist the temptation to post an anxiety-laden question such as “When are we going to roll?” Such questions will annoy the other members and mark you as a newbie.
As you wait to see if Jim will issue a roll Trade Alert, familiarize yourself with these two topics: Does this roll Alert apply to me? and Am I going to get assigned?

That way you’ll be prepared to take action if needed. And know that it’s very possible that the stock price will rise on cue so that you don’t have to do anything at all (except celebrate!).