Buying LEAPS on SPY?

[nwoptions]

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

 

[zdreg]

I'm worried about time decay though.

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

 

[lindq]

I'm worried about time decay though.

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.

 

[earth_imperator]

There is a better alternative called XSP

 

[earth_imperator]

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.

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

 

[newwurldmn]

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

I would rather synthetically create the LEAP by buying stock.

 

[mervyn]

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

 

[nwoptions]

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.

 

[mervyn]

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

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