selling put leaps recommended? opinions please.

Discussion in 'Options' started by IBRex&me user, Oct 24, 2023.

  1. bought AAPL call Leap yesterday, and considering selling put leaps in SPX or NDX or bwb's. the margin requirement is low for the return. please see attachments. l realise that bwb or put ratios are slow moving compared to just naked put. margin impact seems significantly lower than TW or TOS. is this just disguised and its margin requirements revealed when things get ugly? thoughts?

    Screenshot 2023-10-24 at 16.34.45.png Screenshot 2023-10-24 at 16.35.58.png Screenshot 2023-10-24 at 16.34.45.png Screenshot 2023-10-24 at 16.35.58.png
     
  2. ironchef

    ironchef

    You asked about writing puts but started by telling us you bought AAPL calls?

    What is your thesis of buying AAPL call now?
     
  3. ajacobson

    ajacobson

    Just addressing the challenges of selling put leaps. Lower % erosion than shorter dates and a high likelihood of needing one or more adjustments over shorter dates.
    Don't confuse absolute theta with percentage theta. Leaps have high absolute theta, but as a percentage of the price, they're crappy.
    No great hard and fast rule, but I would be looking at 2-3 month options. Fully understand the tax implications of rolling (adjusting).
     
  4. mervyn

    mervyn

    SPX naked put is fine if you are the balance to play with, it is safe bet at 4000. 17k premium, that takes your entry to 3820. but SPX is cashed settled, I'd do it in /ES.
     
  5. mervyn,
    is the risk reward better for /ES?
     
  6. mervyn

    mervyn

    id think the greeks should be similar. Difference you can take the underlying and wait for a rebound and make more money, like a stock. While SPX you have to take losses, in cash. I had traded SPX for 3 years and it wasn’t worth it.