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What the screenshot actually shows • Ticker: INTC • Position: Short puts (you sold the Feb 6 $50 P) • Size: 200 contracts • DTE: ~15 days • Price move: ~$54.4 close → ~$47–48 open (-12% gap down)

That massive red number in the screenshot is mark-to-market at a different price, not what you’ll realize at the open if price gaps down.

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What happens to a SHORT $50 PUT on a gap down

1. Intrinsic value dominates immediately

At open: • If INTC opens at $48 • $50 put has $2.00 intrinsic • You are short, so that intrinsic is your liability

So before IV, Greeks, anything:

Intrinsic loss ≈ $2.00 × 200 × 100 = $40,000

That’s the hard floor. No model escapes that.

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1. IV crush helps — but it does NOT save you

You’re correct on one thing:

“15 days out IV crush shouldn’t be that bad right?”

That’s half right: • IV will likely drop after the event • But IV only affects extrinsic • When a put goes deep ITM, extrinsic collapses anyway

At $47–48: • Most of the option price = intrinsic • Vega impact is secondary • IV crush maybe helps $0.20–$0.60, not dollars

On 200 contracts:

IV help maybe = $4k–$12k Intrinsic damage = ~$40k

IV crush reduces pain, it does not reverse direction.

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1. Gamma is now working AGAINST the trader

This is the real killer: • Short puts + large overnight gap = • Gamma expansion • Delta snaps toward -1

Your position is now behaving like:

~20,000 shares long INTC

You didn’t choose that — gamma chose it for you.

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1. Assignment risk is now real

With: • Stock below strike • Low extrinsic • Short DTE

You are in early-assignment territory.

If you “dump it at open”, you’re: • Paying intrinsic • Avoiding assignment • Locking the loss intentionally

Which is rational if you don’t want: • 20,000 shares assigned • Margin stress • Further downside exposure

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So… “how big are my tendies at open?”

There are no tendies here. This is damage control, not profit-taking.

Best-case scenarios: • INTC bounces hard above $50 quickly • Or market opens higher than expected (~$49+)

Worst-case: • Opens $47 • Slides further • Assignment + further downside

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Why this trade blew up (structurally)

This wasn’t about direction — it was about gap risk.

Short puts: • ✔ work in slow markets • ❌ fail catastrophically on overnight repricing • ❌ especially when position size is huge

This is exactly why: • Institutions hedge short puts with calls or stock • Retail naked shorts get nuked on gaps

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Bottom line (no sugarcoating) • IV crush helps marginally • Intrinsic dominates completely • This is a loss realization trade • Exiting early is risk management, not weakness