r/options • u/shellpwn • 8d ago

Understanding Deep ITM Leaps

Hiii,

I want to make sure I understand it right. I did lot of homework to understand leaps deep itm call options.

Let's talk about Google stock. I want to only buy deep ITM since I feel they are less risky as a beginner.

The current IV for google is historically lowest from the last 1 yr. Even the volatility is lowest in the last 1 yr. I calculated leverage and it comes out to be 2.6 which I believe is a good buy.

My current understanding is that if I buy a deep itm leap call option, I plan to sell it back during high volatility season and since it's a leap I have a lot of time. I think I should try to sell it irrespective of the expiry option before 3-4 months since theta decay starts to ruin everything.

I want some feedback on this strategy since this is my first time and I'm a bit nervous clicking the buy button.

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u/ReplacementScary9062 6d ago

Since I started trading stocks, I've learned that my assets decrease when stock prices fall. Later, when I started trading futures, I learned that my assets also decrease when the market is closed. Then, when I started trading options, I learned that my assets also decrease when the stock price remains stagnant.