Subject: Re: OT: Options - Calls vs. Puts
And in any case, unless you are buying in the money LEAPS to get some leverage, you are betting on the timing of the market in any other option trade.


I respectfully disagree. I have many trades for all of the above (not on TSLA, I have no ability to estimate value there) both buying and selling puts and calls and even in the case of ITM LEAPS I still have a bet on timing the market. There is still a defined expiration date of the LEAP holding where one will be forced to make a decision. Do I take profits/losses and move on or do I maintain the position by either exercising my optionality or rolling to another option contract date into the future?
That is a completely different mindset than buying shares and holding long which, I believe, most stockholders would define as NOT being market timing.

Jim's advice for planning for 1-2 rolls when putting on a deep ITM LEAP position is sound and, in my real world experience, a way to mildly mitigate the timing issue. But make no mistake, timing is still in play because the market can disagree with your valuation opinion longer than you may stay solvent. I recently rolled some BRK jun23 LEAPS out to Jan25 and the interest on that roll was nearly double what I paid for the initial Jun23 contract. The trade is still nicely profitable but there will come a point where interest rates and BRK valuation will force me back to an unleveraged position. That's still market timing when compared to the base case of simply holding shares. I'm comfortable with it for now but others may not be.


Jeff