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Buying LEAPs on QQQ and SPY
Posted on 10/27/25 at 10:39 am
Posted on 10/27/25 at 10:39 am
I have been buying 2027 call options about 250 out of the money on both ETFs. Looking at their curves over 5 year periods, there is a strong trend to gain over 2+ years. Low, defined risk and substantial gain in a bull market, but can wait out dips and still profit.
Any thoughts on this approach from people who are actually knowledgeable and not an amateur like me?
Any thoughts on this approach from people who are actually knowledgeable and not an amateur like me?
5
Posted on 10/27/25 at 11:09 am to kjacksonp
Can you provide the expirations and strikes? I can opine on your strategy, but it would be helpful if you could provide more detail.
Posted on 10/27/25 at 11:51 am to kjacksonp
quote:
out of the money on both ETFs
What are the strikes on these calls?
Posted on 10/27/25 at 1:12 pm to kjacksonp
Generally, if you buy high delta like .80 you're essentially doing a synthetic stock replacement at ~30% the cost of holding the underlying. Very easy way to go long without buying shares.
Buying out of the money you can gain more, but you can also lose more/all of it if we hit a downturn, since there's a chance you never get into the money if there's say a 12-month bear market. The premium can expire worthless.
Buying out of the money you can gain more, but you can also lose more/all of it if we hit a downturn, since there's a chance you never get into the money if there's say a 12-month bear market. The premium can expire worthless.
Posted on 10/27/25 at 1:31 pm to Azazello
For QQQ, when the ETF was in the 450 to 500 range I was buying Jan '27 740 calls; and for SPY (I forget the ETF price at the time) I have been buying December '27 calls at 900.
QQQ calls were 800l, now 2300
SPY calls were 402, now 1000
On the calendar year I am up about 13700 including some profits from puts that I bought after big run ups, and sold after correction.
I realize the risk of a downturn keeping them from ever reaching the strike, but more leverage this way and defined risk.
My primary funds are managed by investment folks so this is "hobby" investing.
QQQ calls were 800l, now 2300
SPY calls were 402, now 1000
On the calendar year I am up about 13700 including some profits from puts that I bought after big run ups, and sold after correction.
I realize the risk of a downturn keeping them from ever reaching the strike, but more leverage this way and defined risk.
My primary funds are managed by investment folks so this is "hobby" investing.
This post was edited on 10/27/25 at 1:32 pm
Posted on 10/27/25 at 1:37 pm to kjacksonp
On those, I prefer call spreads. Cheaper and still has a great return.
Posted on 10/27/25 at 2:53 pm to kjacksonp
In general, most options expire worthless.
It’s about 75%.
I’ve sold options.
I have not bought them.
If you are right, you win big.
It’s about 75%.
I’ve sold options.
I have not bought them.
If you are right, you win big.
Posted on 10/27/25 at 3:55 pm to makersmark1
If you look at two year spans and stick to ETFs like SPY, QQQ, and some others, its very hard to find a period where there was a two year loss. If one buys out of the money but greater than two years out, I think there is a reasononable (greater than 50%) chance of gaining some appreciation in the price of the option. Not expecting to exercise it; that is, not expecting it to reach the call price frequently, but with some modest upward moves in the market the options can be sold at a profit and rolled into a later expiratioin date.
But what dio I know? I have risked about 20K doing this and have made aboiut 20K over all this year, BUT a major downturn would probably wipe most of that out. Not claiming to be an expert, just trying to see if others have looked at those long term curves and LEAPs.
But what dio I know? I have risked about 20K doing this and have made aboiut 20K over all this year, BUT a major downturn would probably wipe most of that out. Not claiming to be an expert, just trying to see if others have looked at those long term curves and LEAPs.
Posted on 10/27/25 at 4:37 pm to kjacksonp
As long as you’re not risking money you can’t afford to lose, you will be fine.
I’m not calling for a drop or anything, but they do happen sometimes.
I sell call options and put options on companies that I follow. Most of them are well known companies with long operating histories. I have had shares called away, I’ve had shares put to me, and I’ve collected premiums with no action on the underlying stock. The underlying stocks can go up or down 30-50% in any given year.
Good luck.
I’m not calling for a drop or anything, but they do happen sometimes.
I sell call options and put options on companies that I follow. Most of them are well known companies with long operating histories. I have had shares called away, I’ve had shares put to me, and I’ve collected premiums with no action on the underlying stock. The underlying stocks can go up or down 30-50% in any given year.
Good luck.
Posted on 10/27/25 at 6:57 pm to kjacksonp
quote:If ou have leaps you should be able to wiggle your way out of a downturn.
BUT a major downturn would probably wipe most of that out. Not claiming to be an expert, just trying to see if others have looked at those long term curves and LEAPs.
There’s a lot of intrinsic value to utilize.
But if 2008 happened…well…
Yeah don’t go full port.
Posted on 10/27/25 at 7:06 pm to makersmark1
All the Leap Call Options I have purchased in the past few months have all had 1/15/27 expirations, with the exception of a few that only went out to mid 2026. When purchased I buy strikes that are in the money and have a Delta of approximately .7 (typically about 10-15% less than market price), make sure there is open interest, volume and IV.
The price for 1 contract usually cost about 20-25% of buying 100 shares.
Find good stocks or ETF's and wait for crappy days and get good entry points.
I own multiples of these:
QQQ
OEF
NVDA
PLTR
Hood
CRM
SOFI
FBTC
AMD
Google
AMZN
BTQ
Cake
CRCL
UUUU
LAR
NVTS
RCAT
NB
I own blocks of 100 shares on the big ones and sell covered calls on those as well.
The price for 1 contract usually cost about 20-25% of buying 100 shares.
Find good stocks or ETF's and wait for crappy days and get good entry points.
I own multiples of these:
QQQ
OEF
NVDA
PLTR
Hood
CRM
SOFI
FBTC
AMD
AMZN
BTQ
Cake
CRCL
UUUU
LAR
NVTS
RCAT
NB
I own blocks of 100 shares on the big ones and sell covered calls on those as well.
Posted on 10/27/25 at 7:44 pm to oneg8rh8r
That sounds reasonable.
I thought maybe you were buying long OTM contracts hoping for a big run.
Your way sounds fine.
It could make money.
It could lose money.
But it does not sound like you are way out there swinging for HUGE returns.
I thought maybe you were buying long OTM contracts hoping for a big run.
Your way sounds fine.
It could make money.
It could lose money.
But it does not sound like you are way out there swinging for HUGE returns.
Posted on 10/28/25 at 7:42 am to oneg8rh8r
quote:If you own leaps on any of these you can sell shorted dated calls the same way, it's just a calendar spread, but functions the same as selling covered calls.
I own blocks of 100 shares on the big ones and sell covered calls on those as well.
Posted on 10/28/25 at 7:26 pm to The Scofflaw
I've never done that before, I'll look into it.
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