JNJ - What to do if price goes lower then the strike price at expiration date

12d ago (edited) in Monthly passive income

I would like to see other opinions about what is the best strategy when the price of the stock is lower then the strike price at the expiration date.

Early April, I sold a put contract for JNJ at 150 on 04/19 for $1 premium without realizing that JNJ has earning day in the same week with the expiration price. The earnings where not so good and the price dropped at 145 on Friday, 04/19. Here were my options:

Get the shares assigned at 150 and keep the 100 premium. Start selling CC or wait for the shares to recover and then sell CC
Buy back the contact for a 400 loss ((150-145)*100 + 1*100)
Roll over to another expiration date and get additional premium

I did the third option and I rolled over the contact for same price 150 on May 24 (one month away) for an additional 185 (1.85*100) premium. Even seems a good action (285 premium) the risk is if the stock goes even lower and it might be a big loss.

Any other suggestion of what could do to minimize the potential loss?

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