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Deep ITM (LEAPS) options on SPX/QQQ - things to keep in …
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Reddit · r/options
10+ comments · 5 months ago
Thinking of going long some 90-100 delta ITM options in order to get leverage rather than owning the underlying ETF:s outright on SPX/QQQ or some …
15 answers · Top answer: The further dte you go, the more you are hedging theta. The further ITM you go, the more …
Allocating 20% of portfolio to QQQ LEAPS : r …
27 answers
21 Jun 2025
Bought 30k worth of QQQ LEAPS : r/options - Reddit
371 answers
6 Apr 2025
More results from www.reddit.com
AI Overview
+6
QQQ LEAPS are long-term call options on the Invesco QQQ ETF, featuring expirations over a year away to act as stock replacement or leverage for the Nasdaq-100 index.
Key Characteristics
- Expiration timeline: Typically set 12 to 24 months out to reduce near-term time decay (theta).
- Delta selection: Often bought deep-in-the-money (around 0.70 to 0.90 delta) or at-the-money/moderately OTM (0.60 delta) to mimic stock movement with less capital.
- Capital efficiency: Costs a fraction of buying 100 actual shares of QQQ, providing built-in leverage.
Reddit +5
Common Strategies
- Stock replacement: Holding a deep ITM LEAPS call instead of shares to capture upward market drift while freeing up cash.
YouTube·Options With Davis
- Poor Man’s Covered Call (Diagonal Spread): Buying a long-term, high-delta QQQ LEAPS contract and selling short-term, out-of-the-money call options against it to generate monthly income.
- Dip buying: Community consensus on platforms like Reddit notes that traders frequently scale into QQQ LEAPS when the underlying ETF pulls back or experiences an elevated VIX environment.
Reddit +2
Main Risks
- Time decay: Extrinsic value still decays; if QQQ moves sideways or drops, the option loses value rapidly.
- Volatility crush (Vega risk): A sharp drop in implied volatility can hurt the option's value even if the index rises slightly.
- Early exercise/assignment: American-style ETF options carry risks if held extremely deep in-the-money near expiration.
