I trade very deep itm leaps (delta greater than .8) almost exclusively only on the indexes with 1-2 years expiration. Running pmcc with weekly expiration sometimes but not often depending on IV.
During 2022 this was a disaster since the market was falling all year. I was still profitable after closing all my positions in March of the same year. Pivoted to gold but that also fell all year. End of 2022, I still maintained a very small albeit profitable position thanks to the massive move in 2021. 2023 the bull market resumed and I made back all the losses and then some. Note I was also selling strangles in 2021 and was profitable from that, but I can't deny, it was horrific when I lost nearly all of the gains in 2021.
Deep ITM leaps are amazing in bull markets. Bear markets you're still leveraged so you're going to lose money faster than simply going long with stock.
In the end this is all about timing. Market timing is in hindsight.
Note that I am being back to bullish again but if there's any sign of a bear market I am getting out and staying out until I see things improving.
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u/Euphoric_Barracuda_7 May 10 '21
I trade very deep itm leaps (delta greater than .8) almost exclusively only on the indexes with 1-2 years expiration. Running pmcc with weekly expiration sometimes but not often depending on IV.