Buying LEAPS on SPY?

Hi everyone, the SPY had a Golden Cross on Feb 2. Historically, this cross of the 50-day and 200-day SMAs has led to significant advances in the ETF.

According to a SeekingAlpha article: "The S&P 500 has been higher 15 out of 16 times that this has happened 12 months on, with the average return of +15.7%. The average return is +9.8% six months down the road, +6.7% in three months and +1.9% a month later"

S&P 500 flashes a special golden cross technical signal | Seeking Alpha

I'm thinking of buying the Jan 17th 2025 expiring 400 call. It has tight spreads between the bid/ask.

I'm worried about time decay though.

Would you recommend buying LEAP options on SPY? Or perhaps a PMCC? Naked put?

Thanks

 

Time decay is very small for an option with 1.5 years to expiration.

 

If you're anticipating a continued gain in the S&P, your bigger worry with a long dated call should be a falling VIX and the impact on Vega.

 

There is a better alternative called XSP

 

Falling VIX and IV are good when shortselling options...

 

I would rather synthetically create the LEAP by buying stock.

 

I have many LEAP on beat up stocks, WOLF being one. On index, probably not, premium is too costly.

 

Sorry, do you mean a long synthetic future (long call and short put at same strike price)? I notice that time decay is minimized with this trade.

With regards to premium being too costly, there's always the TQQQ. The drawback is that it's leveraged.

 

closed all WOLF leap contracts with 30% gains today with the off-take agreement, wait for pullback again,