The SEC has imposed rules for short sale and economically similar dealing in about 800 financial related companies. Please take note the rules are being updated by the SEC on an ongoing and speedy basis.

If you have short guts on financial counters, probably it is a good idea to close the position. If you have OTM calls, it is probably a good idea to exit the positions. They may treat call selling as another manipulative way of short selling.

If you do not want to exit the positions totally, convert your short guts to ITM covered call writing. That means, buy back your put and buy the stock. Keep the ITM call. We afraid regulators do not look at short strangle/short straddle/short guts in a genuine way of non-directional trading. and treat it as single options selling.

With ITM covered call writing, we do not get the time value from short put, only from call's time value.

Please check whether the short selling rules are applicable to non-financial counters. Check the list of shortable stocks/unshortable stocks with SEC or brokers.

Any commentary or illustration generated in this forum is provided for educational purposes only. You must decide your own suitability to buy or sell options. This is neither a solicitation nor an offer to buy/sell stocks or options. Commission was not taken into calculation. Note: You have to know the risk of options writing before execution, especially naked call/put writing, bull/put spread, covered call writing, short straddle, short strangle, short guts, short/long iron butterfly, short/long wingspreads and short/long box.

The list of financial stocks affected by SEC short selling regulations:

http://www.sec.gov/rules/other/2008/34-58592.pdf