Thank you for the response. I am not sure I understand though: would you mind explaining how selling the put at the same strike would close my long LEAP? Thanks!
I was making a correction to my earlier post. Short (not buy) the same strike put and short the shares. You'll be long the synthetic shares from the option strike and short natural shares. It's a reversal (reverse-conversion). Shorting the put converts the long call into long synthetic shares. Shorting the put also allows you to avoid any edge loss due to closing the DITM at unfavorable prices.
because short put and short stock = short call pls don't tell me you trade options and don't know synthetics
99% of the ppl here don't understand synthetics. Anyway, you'll free up almost all of your available requirement for holding the shares, and your price risk is zero.
%% WELL since you said ''DITM + moving in your direction''; hit the bid \ask spread............................................You noted bid\ ask spread ''is bad .'' LOL, maybe , you saying you did not study that before entrance?? IF it was me, i would also print a color chart of that/ education is eXpensive / but that's how many of us learn.................................................................... Good question. I hit the bid on a QQQ option/market order once + NO confirmation; called Options EXpress + they said ''don't worry about it /we are having trouble.'' Somewhat scary/ but worked out well, wide bid \ask spread even on that liquid option.
Sell short an equal-delta amount of the underlying (U). If U declines while the LEAP is still active, the net value of the position will likely increase, bc the delta of the LEAP will decline and its IV will likely increase. Not sure, but I think the $ from the short will be available to you for new positions. Of course if U has huge decline below the LEAP strike, you could conceivably lose money, and you'd have to do some position mgt, but if it is really DITM now, a net loss on the position may be low probability, esp if you manage it to prevent a loss. Once the short U opens, you could also put in a limit order to replace the LEAP w/ a shorter duration call, to hasten closure of the entire position. Since you've already got the U short for a delta-neutral position, you can wait patiently until an acceptably tight spread becomes available on the duration change order. Once that order goes thru, you'd then of course close the short U. Actually, once you get the short U in place, any of the other option strats mentioned could be executed -- the delta-neutrality of the position will free all of those executions from having to hurridly accept a poor spread on the option transaction.
Sure, then he's bought a put at the call strike. That's fine, but then he may as well simply try to fill within the edge loss equivalent to the put. Unless he wants to be long the put in lieu of simply closing at an edge loss < the value of the put.