Good advice Eagle. I am rolling WMC as I was stuck on a short Put trade. I am out to Jan and will roll out and down to April on further PPS decline. When I am done(out of premium, I will be at the 13Apr17.50 @ EVEN premium. That is from Oct22.50@ .40 premium. Kind of fun, in a weird way. If I get SOL'd I will own the stock at 17.50, which is about a buck below IPO price. I am OK with that. Will execute in stages , as necessary.
I still have made good money with short Puts...as you said, have the cash to cover....and if the world goes #$%$ up, so does your account...but at that point we are all screwed anyway, so who cares...;-)
Good luck. There is an interesting political play that has been mentioned several times. What would you think if we went off the fiscal cliff purposely? It is being batted around as an alternative to get out from under the spell of Grover Norquist.
If we let Jan 1 slide by without resolving the fiscal cliff, then all the tax cuts expire. This effectively gets the Republicans who signed his pledge out from under it. Then it becomes a whole new ball game. The GOP won't be fighting to KEEP the tax breaks, they'd now be fighting to try to get them back. Can you imagine the volatility that would create? But I could see this happening as a way to "wipe the slate clean" and return both parties to a level that would allow for compromises to be introduced. This could happen no matter who is elected POTUS.
Personally I'm around 95% cash and basically on vacation as all I have to do is wait and monitor for the best entry and covering points to present themselves. I'm sleeping well at night. :o)