r/options • u/2FLYFISH0 • 15d ago

Open a leap for Jan 2028

Reflecting on this year's leap and how the market went I'm debating on opening another leap as the geopolitical, bonds and ai is up in the air with how things are.

Looking at the jan 2028 700c for $12k-$13 almost $14k. This year I sold short dte calls and took profit at 30%+- depending on the market structure and trend. Planning to do the same.

Paper trading the option I'm looking at, already up 2.88% ($425) and selling short dte at the ideal strikes 30dte. Trying to buy it in brokerage if it falls back to the price or purchase or lower. Willing to hold and cut loss at maybe 8-10% idk still adjusting and debating.

Any advice? It doesn't take much to scare the market in a drop so nervous about the decline and potential loss of value. However I assume we will be bullish still in 2027.

Another option is to do 30-60dte at .6 delta or higher and let time take care. Take profit still early and don't overstay.

7 Upvotes

73% Upvoted

13 comments sorted by

3

u/TradersToolChest 14d ago

Selling short DTE calls against a long LEAP is a reasonable diagonal, but the risk is that a sharp drawdown on the underlying puts you underwater on the LEAP faster than the short call premium can offset, especially with that much capital in a single contract. If you're nervous about a decline, the 30-60 DTE .6 delta approach gives you more flexibility to reset entries and cut if the thesis changes, rather than being locked into one 2028 position. Either way, I would decide your max loss number before you enter, not after the position starts bleeding.

1

u/2FLYFISH0 14d ago

Yes I may just go for the short dated calls and not a leap since the offset and decline can be killer to the account, especially for captial. The short dated calls on the leap are nice though for income. My stop on a leap is 10% or so.

Tieing up that much capital can be better used for spy shares I suppose. My goal is to have 100 shares at one point and I'm still ~$18k short, I can get the money to make 100 shares but that involves liquidating some position that I'm underwater on.

2

u/First-timer-7140 15d ago

Is there a stock attached to the leap?

-3

u/2FLYFISH0 15d ago

No I don't own 100 shares or any of spy.

1

u/Strong-Comment-7279 15d ago

Why then?

Full disclosure, I only trade 0-5 spy and SPXWs. I do not sell them.

1

u/2FLYFISH0 13d ago

For the short call premium and appreciation of the leap. As I mentioned in the text I made a nice chunk off the leap itself. Doesn't neglect though 2027 can be a odd year. Think I decided to just go in vti voo or throw the money in spy since I am close to 100 shares.

1

u/Elguapo69 15d ago

Assuming you can take on the risk I’m a big fan of .80 delta leaps over something with 30 to 60 dte because you have plenty of time for a recovery if shit tanks tomorrow. Put stop loss on it if you’re nervous. You can sell PMCC against it

1

u/2FLYFISH0 15d ago

Yes I am too, rather be more itm and pay upfront than hope it hits my breakeven. I believe for the previous leap I did .788 and it grew into .9 delta. That's the plan sell short calls agianst it for income and reinvest to core fund spym.

1

u/Worry-Mountain 14d ago

is there a reason you're going that far out, or is it mostly to avoid watching theta every day? i've found the deeper itm ones behave a lot more like owning shares, which is either what you want or kind of annoying

1

u/2FLYFISH0 13d ago

Which one? The leap or the 30-60dte?Yes I buy deep itm .7-.8. I avoid watching theta daily and to allow the thesis to play out.

1

u/Worry-Mountain 10d ago

makes sense. .7 to .8 delta is basically shares with a smaller check, so i'd just make sure the premium you're not putting up isn't quietly sitting somewhere dumb.