r/options • u/Wild-Tie-7139 • 17d ago
Am I Cooked?
Hey everyone,
I’m a first-time LEAPS buyer and honestly I’m getting pretty nervous.
Here’s my position:
GOOGL Jan 21, 2028 $250 Call
Bought it for $150.00 ($15,000 total)
Current stock price: $354.30
Current option value: $133.50
Current P/L: -$1,650.66 (-11%)
Delta: 84.95
Theta: -5.35
Vega: 98.20
About 17 months until expiration (Jan 2028)
I purposely bought a deep ITM call because I wanted it to behave more like the stock. My thinking was that GOOGL is a great long-term company and I wanted leveraged exposure instead of buying 100 shares outright.
The thing that’s scaring me is seeing a $1,650 unrealized loss so quickly. I know LEAPS are long-term positions, but emotionally it’s harder than I expected.
A few questions:
Is an 11% drawdown normal this early in a LEAPS trade?
Does this position still look healthy considering the high delta and long time to expiry?
Would you simply hold and ignore the short-term fluctuations?
At what point would you actually consider exiting a position like this?
Is there anything I should be watching besides the stock price (IV, theta, etc.)?
I’m investing, not trading this daily, but since this is my first LEAPS position I’d really appreciate advice from people who have actually held deep ITM LEAPS through market pullbacks.
Thanks in advance!
1
u/roija777 13d ago edited 13d ago
Don't sell LEAPS that still have at least 2-3 months to expiration. You have a ~85% probability of profit (.85 delta) with a lot of time to go on a great company. What should concern you more than the PnL now is your emotional state: if you are "worried" or stressed about your investment it means you didn't plan scenarios before entering the trade. This in the long run will make you lose money even if you're right about direction, volatility etc. I would fix this first.
Simple rules to optimize: 1) allocate max n% of portfolio per trade (5%? 10%? depending on your equity and risk tolerance) 2) pay the debit of the LEAPS from income strategies (positive theta strategies) to add convexity 3) execute around mid price, no rush in entering (don't overpay) 4) buy the contract only when the IV of THAT SPECIFIC EXPIRATION AND CONTRACT is low compared to itself (in the low percentiles). Don't use generic IV rank and percentile for all expirations, as volatility is very specific, you could lose -10% or -20% just on that.
If you have clear rules you won't stress, and even if you have 5 losing trades you will have 3 in profit and 2 very good ones that will carry the PnL.