| > You can back door around $70k per year into a Roth currently I believe. You can only backdoor $7k/year into a Roth IRA. That isn't much. If you have access to a qualifying 401k plan, you can mega-backdoor $46,000 into a Roth 401k. Many 401k plans do not support this, however. In practice, a plan is unlikely to support it if the company doesn't give a 401k match (it's basically impossible for a plan to meet the "non-discrimination" requirement without matching). > And I’m not sure why you’re talking about LEAPS. [...] Theta is only one of the Greeks. Because the effect of theta is least for LEAPS. They're the "most share-like" options. > Options are naturally leveraged: you have synthetic positions on [complicated Greeks math]*100 shares with every option. I agree that the "natural leverage" is the reason for the appeal, but the 100x multiplier is priced in. In practice, IIRC (it's been a while) I've found that, with long-dated calls near the money (ideally a little bit in the money, for lower risk), you end up with about 2x leverage. The "100% loss" downside sort of gets "balanced" (debatable) by "2x upside". In the past I've felt really smart doing this until it's blown up in my face. Given the multiplicative nature of gains/losses, I'm not sure it's a good deal at all. > Same with futures contracts re: natural leverage. Curious about this. I suspect that it's a sucker's game, but wouldn't mind learning more. |
Debating the availability of a Roth backdoor is something that's orthogonal to the discussion. I agree that your $46k number is the correct number, so adjust the numbers in my prior post as appropriate (e.g., it'll take 5 years to get to $200k in a retirement account). I still assert my primary conclusion: buying property is generally not the best option on a purely financial basis.
>> [Options stuff]
I disagree with your view that LEAPS are the "most share-like" options. Short dated deep in the money calls are essentially a synthetic stock position, and they are the most share-like in that they will move nearly 1:1 with stock price whereas LEAPS do not move 1:1 with stock price fluctuations because of time attenuation. If leverage is what you want then there are probably better options than LEAPS (rolling 3 month to 6 month positions maybe) because you pay out the nose in terms of time value on LEAPS.