I’m looking to recreate a leveraged position on AAPL (approx. 5x) using options, similar to how a leveraged ETF would track daily movements, but I want to avoid the daily reset/volatility decay of ETFs if possible.
My criteria are:
Leverage: ~5x effective leverage (omega).
Theta: Minimal decay. I want to hold this for a few weeks/months.
Tracking: High correlation to the underlying price.
I know deep ITM LEAPS (80+ delta) are a standard way to emulate a stock replacement, but they usually only offer 2x-3x leverage. To get 5x, I have to move closer to ATM, which kills me on Theta.
Is there a specific structure (e.g., ZEBRA, specific spread width, or rolling strategy) that effectively hits 5x leverage while minimizing extrinsic value decay? Or is 5x simply too high a target to achieve without accepting significant Theta risk?
Structuring a static 5x leverage position on AAPL with minimal Theta?
byu/BAMred inoptions
Posted by BAMred
3 Comments
Well everything has a tradeoff.
You coukd get a positive theta position to odfaet the theta on otm calls by selling otm puts maybe?
Ofc that increases downside risk but nothing is free.
Combine an itm leaps call with otm leaps calls until your position lambda is 5. Sell pmcc off the itm call to help with theta. Going leaps expiration is already enough of a theta hedge.
You gotta think of how much theta you are paying for how much delta adjusted nominal exposure. $30 a day in theta on a $150,000 delta adjusted nominal position is nothing for example.
Why do you want this? lmao
You also can’t ignore the daily reset or vol drag.
Don’t do this lol