LEAP trading

Discussion in 'Options' started by delta1, Jun 5, 2006.

  1. delta1


    Anyone in here a big LEAP trader?
  2. OTR



    I trade Leaps and sometimes substitute them for stocks when writing covered calls.


    Option trading information and tools the pros wish they had! A former Chicago Mercantile Exchange employee reviews stock option trading software, books, and web sites and online income opportunity.
  3. yes i trade 300 or more leaps a month . all deep in the money with little premium.
  4. I guess it must work for you. Puts and call? Long or short? Do you usually close them each month, or do you have like 4000 positions open all the time?

    I'm considering LEAPS. I like the huge premium on selling puts, You get a lot of downside protection at the price of lower annualized yield.

    (I've been wanting to start a thread titled "I Made $100,000 Next Year.")
  5. MTE


    The whole point of selling options is collecting time decay. With a LEAP put you got virtually ZERO time decay so you'll be holding that short for months with all the risk, but no reward whatsoever.
  6. And the spreads are brutal.
  7. from readin' your last few posts it is pretty clear u are confused about options overall; u got many facts backwards and it seems u just dont understand how options behave. i strongly suggest u to study them well before riskin' any money.
  8. I actually got that from a book I'm reading called "Put Options". The author came to the conclusion after a few years of selling short term puts that the hefty premium on LEAPS offered a lot of room to move to the downside before losing money. He also buys OTM index puts for crash protection. Of course this was written in 2003 when the premiums seem to have been a lot higher - like $12 on OTM IBM puts for an annual yield of 12%. Today the same thing would pay about 7%.

    What other facts do I have backwards?
  9. MTE


    Another B.S. book about premium selling.

    Once again:
  10. Can you explain why the LEAP put has ZERO time decay? You get 1 year or longer till expiration. Why does it not have time decay?
    #10     Jun 8, 2006