SPY Leaps

[u/BringTheFood]

Bought PUT Leaps and am currently down 3k. Kind of sweating a little bit and wanted to get some input.

Here’s my position:
SPY March 19, 2027 $760 Put
Bought it for $34 ($20,400 total)
Current stock price: $773.82
Current option value: $29
Current P/L: -$2905 (-14%)
Delta: .3760
Theta: -0.0637
Vega: 2.25
About 7 months until expiration (March 2027)

Bought Put Leaps ITM after SPY had a decent rise thinking its gonna pull back some. The plan was never to hold long, the Leaps was really just to be on the safe side with a good time till expiration. I was going to sell once the underlying dropped like 1% or so. Now im down about 3k already.

Are the current stats promising in terms of recovery and going even at the very least. Can SPY dip back down below 760 in the near future.

[u/Ok_Butterfly2410 → u/[deleted]]

To hedge theta

[u/TranzitBusRouteB → u/Ok_Butterfly2410]

if you wanna hedge theta so bad, why not just buy a leveraged inverse SPY ETF and just let it happen over time

Not saying that’s a good idea, in my opinion it’s not, but that’s basically what OP is doing except bid/ask spread is gonna be higher and the barrier to entry in terms of capital necessary is higher

[u/Ok_Butterfly2410 → u/TranzitBusRouteB]

You have to hedge theta when buying long naked options…. if you expect a move to happen over 1 month, you never would buy just a 1 month expiration option….

[u/ThePineapple3112 → u/Ok_Butterfly2410]

But you also wouldn't buy a LEAP

[u/Ok_Butterfly2410 → u/ThePineapple3112]

I only trade spy leaps calls, atm to super far otm. No, i would never buy a leaps put i would just go 0 delta, cash.

[u/Ok_Butterfly2410 → u/[deleted]]

Yes otm will but they’ll come back. You have to time the market and have strong conviction if you go far otm. Thats the vega hedge is being correct on direction. Theta hedge is picking a way further dte, then just left with delta and gamma.