with the new LEAPS coming out later this month, how long does it take for them to trade with some degree of liquidity? I know this will vary between liquidity of stocks but at what point does the bid ask become palatable? Also why does spy have dec leaps but not any other securities? Will the sept release date also have the new dec leaps? FWIW I searched on google and cboe but couldn't find the answer. Not one that was easy to tell anyway.
I’m not sure whether you’ll find anyone trading much of those, but if you need specific information then you may want to contact CBOE. We’ve been requesting from CBOE to add new strikes and exp dates on some equities/options, and they’re responsive via email. They’ll add new strikes when it makes sense, while adding new exp dates depends on trading volume of the existing exp dates. For example they’ve been slow with adding LEAPs on VXXB because there isn’t enough volume. You can also review trading volume on any 2020 LEAPs to get an idea of potential volume on 2021. It may be growing exponentially.
Option liquidity isn't the same as liquidity on equities. You can find liquidity on illiquid strikes and expiry and you'll only pay a modest premium. A market maker can find liquidity almost anywhere in the chain to neutralize a position. So just because there's no interest on it, doesn't mean there's no liquidity (at the money). The caveat is when you're far from the money, you'll lose liquidity on any expiry. LEAPs in particular tend to be heavily traded, and you'd have no problems trading presumably liquid expiry the day they're issued. For my part, I'm really only concerned with where I expect liquidity to be on expiration. Think of it this way, when expiration looms, the market maker knows you MUST get out (or exercise / assign), so there will be less competition to jump at your order. On the other hand, a MM may well think you can rest an order for a month opening a LEAP--a month he could be collecting premium.