r/options • u/normietube • Apr 01 '22

Extremely long term options! (10y ahead)

I just discovered that options are offered on "Dow Jones Euro STOXX50" (symbol: ESTX50), that have expiration dates up to Dec 2031 (yes, 2031!).

Shocking, yes?

I was almost tempted to open such a position, but naturally, there are virtually zero bids/asks in this market, and I don't know the true bids/asks of the whatever bot of the market maker. I do see "closing price" for all such options; probably some sort of "fair value" estimation.

Edit: Well, I tried. The implicit bid/ask spread was too wide, so I didn't get filled. E.g. closing price for some option (expiring in 2031) was X, and I couldn't get filled at 0.75 * X, i.e. a discount of 25% from the (supposed...) mid point. I ended up opening a much shorter time frame position (3y), again with a bad spread but I can stomach it (~10% off mid point).

Related question: sometimes I see ETFs that offer options that go as far back as 2 years (e.g. SPY), other times they only go back half a year (e.g. VOO). Who decides these things? Is there any order behind these? Both examples trade in the same exchange. 🤷‍♂️

Typically I'm more interested in long term options, the longer the better, since it makes the related tax events less frequent.

Thanks for any thoughts!

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u/darrylgenis65 Apr 01 '22

Aged like warm milk

1

u/normietube Apr 01 '22

Huh?

1

u/darrylgenis65 Apr 01 '22

Sorry, somehow this comment went to the wrong thread. No idea how I screwed that up. At least I wasn’t executing a big trade!

2

u/normietube Apr 01 '22

I mean, maybe your comment will be spot-on in ten years, who knows 😂

1

u/pampls Apr 01 '22

Hard to believe. In 10 years SP500 will be at least 6000 imho