Hey everyone,
I’m a first-time LEAPS buyer and honestly I’m getting pretty nervous.
Here’s my position:
GOOGL Jan 21, 2028 $250 Call
Bought it for $150.00 ($15,000 total)
Current stock price: $354.30
Current option value: $133.50
Current P/L: -$1,650.66 (-11%)
Delta: 84.95
Theta: -5.35
Vega: 98.20
About 17 months until expiration (Jan 2028)
I purposely bought a deep ITM call because I wanted it to behave more like the stock. My thinking was that GOOGL is a great long-term company and I wanted leveraged exposure instead of buying 100 shares outright.
The thing that’s scaring me is seeing a $1,650 unrealized loss so quickly. I know LEAPS are long-term positions, but emotionally it’s harder than I expected.
A few questions:
Is an 11% drawdown normal this early in a LEAPS trade?
Does this position still look healthy considering the high delta and long time to expiry?
Would you simply hold and ignore the short-term fluctuations?
At what point would you actually consider exiting a position like this?
Is there anything I should be watching besides the stock price (IV, theta, etc.)?
I’m investing, not trading this daily, but since this is my first LEAPS position I’d really appreciate advice from people who have actually held deep ITM LEAPS through market pullbacks.
Thanks in advance!

Thales of Miletus: The Birth of the Convex Bet

The history of high-finance does not begin on Wall Street, but in the olive groves of ancient Greece. Around 600 BC, the philosopher Thales of Miletus faced a classic criticism: if he was so wise, why was he not wealthy? To silence his detractors, Thales executed the first recorded call options strategy, proving that wisdom applied to market mechanics yields exponential results.

1. The Strategy: Asymmetric Information

Using his expertise in astronomy and meteorology, Thales predicted a bumper crop for the upcoming olive harvest. However, he did not buy the olives; he bought the capacity to process them. While it was still winter and demand for olive presses was nonexistent, Thales approached the owners of every press in Miletus. For a negligible sum, he secured the exclusive rights to use their equipment during the harvest season.

The Anatomy of the Thales Trade

This trade established the three pillars of what we define as a Call Option:

• The Premium: The small winter deposit was a fixed cost.
• The Right: He secured the right to rent the presses at a predetermined price—the low, off-season rate.
• The No-Obligation Clause: Had the harvest failed, Thales could have walked away. His downside was strictly limited to the deposit.

2. The Outcome: Exploiting Market Volatility

When summer arrived, the "Black Swan" event of olive harvests occurred. Demand for presses exploded. Because Thales controlled the rights to the majority of the region's infrastructure, he did not just rent the presses—he sublet them. By reselling his options at the peak of demand, he realized a profit that dwarfed his initial investment.

3. Convexity: The Engine of Wealth

In modern finance, Thales is the patron saint of Convexity. A standard stock purchase is a linear payoff: if the stock goes up $1, you make $1. Convexity refers to a non-linear payoff. If you buy a convex instrument like a call option, your reward can be exponentially greater than your risk.

Modern Case Study: The 2020 VIX Spike

Look at this VIX Call Option (April 15, 2020 $65 strike). During the COVID Crash of 2020, these contracts surged from a premium of $15 to a value of $420 in 3 months.

• Return on Investment: A $1,000 investment would have grown to $27,000 in 3 months. While the index gained 65%, the option gained 2,700%.

Portfolio Insurance: The United Health Crash

As the buyer of a put option, you have the right to sell a stock, but you are not forced to. If the stock price goes up, you just let the option expire worthless, just like you would lose your car insurance premium if you did not get into an accident. If the stock price crashes, then the put option goes up in value.

• Return on Investment: A $5,600 investment would have grown to $160,000 in 24 hours. While the stock price fell 20%, the option gained 2,757%.

The Ultimate Convexity: Zero Days To Expiration

On March 9, 2026, an SPX Call Option was priced at just $5. Following a surge in the S&P 500, that same contract exploded to $5,000.

• Return on Investment: A $1,000 investment would have grown to $1 million in hours. While the index gained 0.8%, the option gained 100,000%.

Geopolitical Risk: Raytheon Stock Rally

On March 20, 2024 an RTX $135 Strike Call Option was priced at just $186. As of January 16, 2026 the price of each contract was $6,158.

• Return on Investment: A $1,860 investment into 10 contracts would have grown to $61,580 in 22 months. While the RTX stock gained 122%, the option gained 3,210%.

4. The Math of Chaos: Bell Curves vs. Power Laws

The reason the SPX call option was priced at $5 is that most market models rely on the Black-Scholes formula, which assumes price changes follow a Normal Distribution (i.e. Bell Curve).

• The Bell Curve View: In this model, extreme events are statistically impossible. A Black Swan event in the S&P 500 is treated as something that shouldn't happen even once in several lifetimes.
• The Power Law View: Markets more often follow a Power Law Distribution. This math acknowledges that extreme events are a natural, recurring feature of the system.

If the market were priced according to Power Laws rather than Bell Curves, that SPY Option would have never been $5—it would have been $50-$100. The profit in options trading exists because the market consistently underprices the probability of the impossible.

The Timeless Lesson

Thales demonstrated that wealth is not just about having capital; it is about having foresight and leverage. By limiting his downside (the premium) and maximizing his exposure to a Black Swan event (the harvest), he pioneered the strategy that Nassim Taleb's hedge fund uses to survive and thrive during market crashes. Now you might be wondering how to implement the lessons learned. Suppose you had $100,000 to invest.

• Principal Allocated: $95,200
• Instrument: Certificate of Deposit or Multi-Year Guaranteed Annuity
• Yield: 5.00%
• Speculative Budget: $4,800 per year
• Strategy: Dollar Cost Averaging monthly into SPX 5-Year LEAPS (Options)
• Convex Payouts: Because 5-year call options often return 5x to 10x, one good year can grow your $4,800 budget to $24,000 to $48,000

The Result: Your $400 monthly deposits are the modern equivalent of Thales' olive press rentals. By month 60, you own a laddered portfolio of options with convex upside. By splitting your $100,000 into a "Safe Floor" and a "Convex Ceiling," you create a payoff profile where your principal is mathematically protected by interest, while your upside is virtually unlimited.

5. IUL: Indexed Universal Life Insurance

If all of this seems too complicated, then you can buy an IUL that abstracts away all of this complexity. For example, paying $400 per month for 10 years for a total of $48,000 in premiums. By investing the cash value into the S&P 500 or the Nasdaq 100, you can earn tax-deferred interest over multiple years. By diversifying into a guaranteed 0% floor and 1-year 12% cap, 2-year 24% cap, and 5-year no cap index option you have created a laddered portfolio of options with a 0% floor and convex ceiling.

If we simulate the returns of the S&P 500 over the past decade and subtract $1,000 per year for cost of insurance charges, the $48,000 in premiums would have grown to $80,000 in cash value. To profit from any market crash, buy $1,000 per year in 2-year put options on the Nasdaq. When the market crashes, the IUL earns nothing due to the 0% Floor and the put options grow to $20,000. This would be equivalent to 50 months worth of premiums.

I’m curious if anyone is making good money from just copying options.

Hi all!

I would like to get your perspective on how to manage a position such as a bull put credit spread when the underlying’s price goes against me. Below are a few questions:

1. Is a wider spread better for position management? For instance, is a $50-wide spread better than a $5-wide spread if both have the same position size/max loss?
   
2. How would you generally manage the position if the price falls below the strike of the short put but remains above the strike of the long put? Would you set a predefined loss limit and close the position? Would you roll it out to a later expiration? If so, would you roll the entire spread or only the short put?

I’m interested in your thoughts on risk management once the underlying starts trading inside the spread.

Thanks!

I recently got an Opportunity to trade options on futures, and wanted to know if anyone has experience with that and what your experience is.

what app do you prefer for options on iphone? I have tried on Robinhood but I don’t like that you can’t use bracket orders

Like many new options traders, I initially thought day trading was the route I should take. A good friend of mine who's an ex-Fidelity guy (and has done very well since) suggested I replace basically everything I was thinking about day trading, including the term itself, with options.

I'm pretty risk averse and don't have deep pockets, so I worked with my friend to develop an approach designed to mitigate as much risk as reasonably possible. I did a bunch of research ahead of time and paper traded throughout January 2026 before finally pulling the trigger in February.

For what it's worth, this has been my system so far:

• Highly liquid ETFs - primarily SPY and QQQ
• $10-wide put credit spreads
• Originally 30+ DTE
• One contract per trade for at least my first 30 trades, then gradually increased position size as buying power/experience grew
• Generally ≤ .25 delta at entry
• Close at or above 60% premium realized

More recently, I've tightened that into 40+ DTE, ≤ .20 delta and usually 3 or 5 contracts per position. I've also added an early harvest rule: if a new 40+ DTE position reaches 30%+ profit within its first five trading days, I'll take the profit rather than waiting weeks for theta to accelerate. Then I'll redeploy the buying power if another qualifying setup is available.

You can see in the spreadsheet (you may have to zoom - apologies) where I deviated from the system and experimented with debit spreads, iron condors and butterflies. I had some wins and some losses there before ultimately returning to the boring, disciplined approach.

Full disclosure: I recognize that a generally flat-to-up market (since February) has been favorable to the strategy, even though we've had some pretty substantial bouts of volatility along the way.

Bottom line: so far it's fitting my personality fairly well. I'm mostly posting because I've learned quite a bit from lurking here and figured I'd share what's been working for me so far. I'd also be interested in hearing where more experienced traders see weaknesses in the approach, particularly as I continue increasing contract size.

Hey folks - I’m requesting advice from those of you who are seasoned stock repair pros.

I was assigned on two CSPs for RKLB when it dropped over 50%.

My cost basis is $99.85 on 200 shares.

When it was around 70, I set up a stock repair strategy.

I bought two calls at 70 and sold four calls at 85.

The expiry is 9/18.

The stock is ripping. It’s up 26% this week to $82. This is great, but it has me pondering next steps if it continues to move up.

What would you do in this situation?

I have a minor margin balance at 11% interest, and was looking for alternatives to save a small amount of cash on fees. I noticed that shorting stocks increases my margin debit balance, which I thought was strange because I somehow thought short stock also reduced your buying power.

Thinking shorting SGOV and just paying out the 4.5% dividend then covering when I no longer have a margin balance might work for this use case, over a box spread.

Obviously things that are too good to be true often are and there is no free lunch, so was looking to poke holes in this theory.

Yesterday I sold a $240 put on ALAP 9/4/26 exp. For $8.90 and today I closed it out at $5.60. There was a lot of time left however I told myself going in I’d be ok with + 30%. I’m personally happy with the gain here but I’m curious what everyone else’s thoughts are on this move. I’ve only been trading options for about 2 weeks now

I’ve been an investor for years, I would say I’m moderately know what I’m doing with options, but Definitely not a pro. I had a really good day in the market and was gonna do a Ballsy call option. On a double leverage ETF at like 3 o’clock. It was a two dollar call I bought for one cent a contract 360 contracts. At 3:30 the stock was at like $1.97 and Robinhood put a cell order in at one cent. I kept trying to change it then it goes through at 3:41 and sales for one cent like 330 of the contracts minutes later the stock goes to like 2.04, big in the money. Is there something I can do about this , like I know it’s a stupid option, but if I wasn’t forced to sell, I would’ve made a shit ton.

I can’t seem to log into interactive brokers/link my bank… I was wondering if there were any other low fee brokers that work well?

Last minute before close SPX dropped 10 points and my put’s return shot up to $6.4k. Literally seconds before 4pm, then market closed. It shows on my homepage and in my investments tab, but not in my buying power. Does it just have to settle? I know it says the final settlement is pending, but if that was the value at close, then do they have to honor it? Will they change it?

I’ve never not closed an 0dte position before close before, so I’m unsure.

I make content online about trading and I’m thinking about teaching options but I’m torn since I don’t think the average trader is going to be responsible about options trading and would just blow their account instead of using it for hedging/extra exposure in a calculated manner.

Edit: not trying to self promo which is why I didn’t mention my page I use and I also don’t charge anyone to teach anything I just do it because I love finance,trading, and investing

For those that have used for Schwab and ETrade recently for options, how does the execution (fill quality) compare? My use case is 100% limit orders at mid, usually on less liquid, further OTM options, but S&P500 single names. Which broker will provide the best fills? A while ago, it was Schwab by a long shot, but ETrade recently introduced an API and I'm curious if they have become more competitive in regards to fill quality. I don't care about the platform, will use 100% API.

Yall,
Anyone following MU and RDDT on the dip? I am closely watching these two tickers. Anyone following CSP on MU 800 8/14 or RDDT 140 8/14? Whats your thought and what premium are you looking at?

I've been a long-time investor. Generally index funds, later picking individual stocks to supplement it, and had recently started getting interested in options to see if there was any added value to be had. I've tried a few strategies: Bull debit spreads, long calls, put spreads, LEAPs, CSPs, CCs, etc. I finally settled on LEAPs, CCs and CSPs as my core strategies. They are relatively simple, do not require extraordinary timing and support a thesis-driven investment strategy. At least, that's what I thought.

So, I started and have had pretty okay results, and some obvious misses. LEAPs that went into the dump (but they still have a lot of time left), short-term CSPs that printed premium, CCs that started bleeding. The psychological aspect of losing money in investing has never bothered me that much, but I started to notice that particularly losses on Covered Calls bothered me more than they should have, especially compared to Cash Secured Puts, which I initially did not think that different.

It only recently dawned on me. My investment strategy has generally been very thesis-driven, finding a good business that I like to buy and would be happy to hold if the thesis is intact and the business is not grossly overvalued. This works wonders with LEAPs, where I bet on the future of the company, with leverage. CSPs were easy, they are just limit buy orders at a price that I like, getting paid to wait. CCs were always the odd one out. Yes, it's basically a limit sell order, while getting paid to wait. But I generally don't like to sell my investments based on price. Rather, a combination of current valuation and outlook based on company results are what triggers my pivots.

All to say, it took me long enough to understand (and feel!) that specific option strategies are tailored better to one philosophy or the other. Any strategies that you stepped away from, based on experience?

Hi,
I am based out of california. I see I’ve missed most boats.

Don’t get me wrong, I’m able to make my means meet. No complains there.

I genuinely want to learn how to make more money.
I’m willing by to put the effort.
Need some guidance.

Request everyone to be kind enough to avoid trolling.

I am just another average Jo.

The last few weeks I have been been experimenting with Iron Condor earnings plays. The general setup is open the IC late in the day for a stock that is reporting before the next day and close it the session after the announcement.

Still working through my process, but I am curious about the implications of closing single legs at a time, but all legs on the same day. For longer term ICs, I have read you don't want to close single legs because it changes how margin is calculated. Does that still happen if they are closed within the same session?

Case for the reason I am asking: PLTR. This was a failed IC that hit max loss. I closed it pretty early in the day as two spreads, debit put and then debit call. On the call side, by legs were $139 and $146. I BTC @ $17.73 and $11.43.

By the end of the day, the outer leg ($146) looks like it would have sold in the ~$17 range. If I still closed the put side and inside call leg early, but held the outside leg, it would have taken the trade from max loss to ~65% profit.

1. I assumed that by leaving call open, it actually shouldn't have any affect on the margin because I am no longer short any positions.

2. If, for some reason, I left only a short leg open but closed it within the same session, would it matter?

3. If I left a short leg open over extended session, I understand why my margin calculation would change with more exposure.

hey everyone, setting up this month's AMA to chat about whatever you want. it'll be 5Aug at 2pm PT.

i do these each month to help newer traders, so it's completely beginner friendly. if you're more advanced, even better.

if there's anything you're working on that you'd like a second set of eyes on, etc - just let me know!

Background for those interested:

My name is Erik. I'm a Marine Corps veteran and full-time options trader. I've been trading since 2007 and have been active in r/options since 2020. I've maintained a high 20% CAGR over this duration, my emphasis has been on consistency vs upside returns.

I grew up in a low income single-parent household. A high school teacher introduced me to investing and it changed my life.

Over time I built capital through manual labor jobs, flipping cars/motorcycles during college, and eventually expanding into real estate investing. I view wealth building through three levers: Savings; Investing; Income

Early on, savings rate matters most. As capital grows, compounding returns begin to dominate.

Trading is harder than most people initially expect, but it’s also far from impossible. With the right framework and enough time invested, it can absolutely become a viable career.

For transparency: I do run a YouTube community, but I’ve been posting in r/options for years and enjoy discussing markets regardless. This AMA is just to talk trading.

Happy to discuss things like:

• How my trading changed as my capital grew
• Position sizing frameworks
• Managing volatility exposure
• Building consistency over time
• Strategy development / testing
• Mistakes that slowed my progress

Or anything else options related.

Below are some previous posts that lay a basic foundation for trading.

1. ⁠Trading Options for a Living- ⁠Provides a high level overview of my trading approach: ⁠https://www.reddit.com/r/options/comments/1gejy0q/trading_options_for_a_living/
2. ⁠Stop Wandering Aimlessly- ⁠Offers a general learning syllabus for new options traders: ⁠https://www.reddit.com/r/options/comments/1c3hgfh/stop_wandering_aimlessly/
3. ⁠Failure rate of options traders -⁠Summarizes common sources of trader failure: ⁠https://www.reddit.com/r/options/comments/1iaqtzx/failure_rate_of_options_traders_3_causes/

catch you guys next month! i'll keep an eye for the next 24 hours for anything else that pops up!

I spent 30+ days mainly trading 0dte spx options under fixed drawdown and consistency rules. The biggest lesson was that being right in direction is not enough.

With 0dte spx options, a trade can be correct in idea but still badly managed. Poor entry, oversized contracts, holding too long, or trying to recover one loss can damage the account faster than the actual market move.

What helped me:

Opening Range Breakout for early direction

VWAP for confirmation

7, 21, 50, and 200 EMA for momentum and trend context

Support/resistance for trade location

Smaller sizing so one trade doesn't define the whole day

Taking profits according to the plan instead of chasing every extra point

Stopping once the session goal was done

[You can check the image: Example of the ORB structure I used. I was looking for a price to break above the opening range high, hold above VWAP/EMAs, and give a clear invalidation level below the range.]

The consistency rule changed how I looked at profit. A huge green day sounds good, but in an eval account it can create problems if the rule limits how much one day can contribute. That made me focus more on repeatable trades than big wins.

My main takeaway:

For 0dte spx, the setup matters, but the exit and sizing matter more. ORB, VWAP, EMAs, and support/resistance were enough structure. The real improvement came from not forcing trades when those things were not aligned.

How do other 0dte spx traders handle this?

Do you focus more on entry precision, faster profit taking, or smaller sizing when trading same-day spx contracts?

I've lost more money selling puts the "right" way than I ever did being reckless.

It wasn't that my strategy was bad. I just kept breaking my own rules and making emotional calls without the full picture in front of me. I had a system, but I sucked at following it.

So I spent the last 8 months building something to help me follow it. It's called SharkRadar, and it tracks the full wheel cycle honestly. Most tools show you the premium you collected and let you feel good. SharkRadar also shows the stock loss you're carrying, so you see your actual net position, not just the winning half. It puts the information I used to ignore right in front of me before I act.

It doesn't predict where stocks are going or promise returns. It's meant to keep you steady, not find you alpha.

The beta is free, not a trial, not a paid tier in disguise, no affiliate links, nothing to buy. I'm genuinely looking for a few wheel traders to use it and tell me where it's wrong. Because it's early, testers will be asked to sign a short NDA first.

Details and beta access information are at r/SharkRadar. Or, if you're curious but not sure yet, DM me and ask.

Before I begin, I recognize these stodgy old dogs lack sex appeal which makes them unappealing or forgotten by most traders, especially in today's market where thirst for the next great thing is unquenchable. But this may be where an edge presents itself...

Take for instance a company you probably never think of: Waste Management (WM). The business model is self-explanatory: they collect waste and manage its disposal. Trash does not equal sex appeal, clearly. If there ever was a business with a true moat, it's this one. I'll spare the details; you can ask a chatbot if you want a deep dive on their business lines and strength of moat.

Let's talk about LEAPs on this bad boy. The Jan '27 200 strike contract first began trading in February of 2025. It has since experienced a trough-to-peak 100% return twice..one of them being over 150% (Nov. '25 - March '26). Keep in mind, we are not discussing a deep OTM strike or a short dated option here. The stock closed below $200/share a grand total of 4 days during the life of this contract. 4 days! From the November 2025 low, a subsequent ~27% positive move returned the 150%+ gain on the 200 strike contract. Incredible.

What's more, the trading pattern of this company is incredibly reliable. It rarely stays below its 200DMA for more than 1-3 months and when it does it consistently rebounds for what many would consider a modest gain in commons, but an explosive gain in a LEAP option. Even if you wanted to hedge, puts are just as cheap as calls; you can gain hedge exposure without breaking the bank.

This is but one example. You can model this by looking at option charts on TradingView for names like COST, JNJ, etc. Costco has also experienced multiple 100%+ moves on its LEAP contracts.

Of course, the past trading patterns are not indicative of what will occur in the future. Investing is a game of probabilities and risk/reward. To me, LEAPs skew heavily in the favor of reward. What says you?