Stock Tanked right after shorting a Put option

Have you ever sold a naked put only to have the stock tank immediately after taking the postion?

This first happened to me when I shorted a put on WTW. Stock tumbled and I ended up selling out of the stock to realise a $500 loss. These are the risks of trading options. But what could I have done better?

Well, this happned again when I sold short a put on MSFT. I collected a $55 premium by selling the $54.50 strike; a 1% return on the max capital outlay.

The very next day the stock dropped 5%. Then again the day after. When the option expired, I was assinged a long stock position at $54.50 while the open market was trading at $50.16. Selling back the stock at this price would have left me with a $434 loss on the stock leg. Taking the $55 premium into account leaves a net loss of $379.

However, here's what I did with options in the weeks that followed that reduced this loss to $70.54.

Start: 2nd Feb

Sold Feb05 $54.50 put @ 0.55

5th Feb. Assignment

Market tanked over 3 days and I took delivery of MSFT stock @ $54.50

8th Feb. Adjustment

Sold Feb12 $50 Straddle @ 1.85

12th Feb. Adjustment

Bought back Feb12 $50 Straddle @ 0.75 (profit $110).

Sold Feb19 $50 Straddle @ 1.72.

19th Feb. Adjustment

Put expired worthless, however, bought back the call at $1.92. (loss $10).

Sold Feb26 Straddle @ 1.44.

26th Feb. Closed the Trade

Call expired worthless. Bought back the put @ 0.72. (profit $72).

Sold the stock @ $51.40. (loss of $310).

Net Premium received from the short options: $217.

Loss on the stock leg: $310.

Net loss before brokerage: $93.

Total Brokerage: $13.54.

Dividend Received: $36.

Net loss: $70.54

Originally when I was exercised on the put, my immediate unrealized loss was $379 ($434 stock loss less $55 in put premium).

So I made back $308.46 over the 3 weeks since by selling options against the stock.