>>do you still wait till expiration or you unwind your position?<<
That depends on several factors. The main factor for me is how much premium is still in the option. Here is an example of one I did today.
HERO - I sold the 22.50's probably when Hero was near 22.50. The stock is at 26.30 earlier today. The 22.50 are now selling for 4.10. 22.50 + 4.10 = 26.60. There was only about 30 cents premium left. Oil stocks had a nice run today. Since most of the premium has been earned and I could use the cash better else where, I bought back my options. In addition, now without the options and HERO trading at recent highs, I sold the shares as well. If the stock was cheaper, I may have sold a higher strike instead.
One thing I did not want to do, is buy back my option and remove my downside protection, and then see the stock drop back down after this little rally we saw. That has happened too many times to me.
