hedging with leaps

From what I can tell you really dont know how rich/cheap 1/2023 vol is trading,and you have know idea what the time skew looks like...you are taking on blind vega risk

look before you "leap",no pun intended :)
 
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happy trading said:
- buy 100 shares of apple.
- buy atm or a little otm put with far out expiration, for example the january 2023 130 put which is trading for around 20 (which is really 2 grand) dollars.
- and sell weekly or whatever you choose, otm calls for just 20 cents( which is really 20 dollars) to cover the cost of the put. and if apple really collapses then either i escape with a max 15 percent loss, or i can roll down the option and buy many more shares.
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This strategy (and most others) can be simplified since selling a covered call is mathematically identical to selling naked put at the same strike. So your idea is equivalent to selling weekly ITM puts against held LEAP OTM puts (without having any shares). Just something to think about.
 
If I were you, I’d be very careful with hedging. It is undoubtedly a great strategy to implement and make profits but when it comes to risk, you should consider all the aspects of it.
 
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