Great question — it just disappears. If the option expires out of the money, it expires worthless, the premium you collected is yours to keep, and there’s nothing to do. Your broker clears it out automatically. The only time you need to act is when it’s close to the money near expiration.
Not a bad structure for a beginner — defined risk is exactly right. Two things I’d check: where’s implied volatility right now? After a Fed week it might be elevated, which is good for sellers. And what’s your plan if SPY breaks below your short strike — adjust, roll, or take the loss? Decide that now, not later.
Priya here. I mostly sell options — credit spreads and iron condors on indexes. Working on being more patient with entries; I used to force trades on slow days and it cost me. Looking forward to learning from everyone.
