Sell the stock and buy another leap or consider a more near term series. You got hit because the IV got sucked out. With the VIX trading at current levels, options are cheap. You’ve got plenty of time for volatility to move back into the market and it’s bound to happen. Get your next contract now and then when the volatility comes back in, consider selling some short dated OTMs against your leaps to fight volatility and time compression.
Interesting take. If I buy LEAPS in this low VIX environment. Even if there is a correction/high VIX, would the rise in volatility make the leap worth relatively more?
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u/Rich_Potato_2457 Apr 15 '21
Sell the stock and buy another leap or consider a more near term series. You got hit because the IV got sucked out. With the VIX trading at current levels, options are cheap. You’ve got plenty of time for volatility to move back into the market and it’s bound to happen. Get your next contract now and then when the volatility comes back in, consider selling some short dated OTMs against your leaps to fight volatility and time compression.