Longer dated options may seem attractive as they hold on to their value longer which gives the holder more time to be right. But does it make sense to employ a long option strategy?
Looking at the theta curve we see that decay is slower for LEAPs and accelerates as we approach expiration. Additionally, LEAPs tend to display greater volatility which means you will be paying more for the longer duration and the increased premium. Since IV is mean reverting we also see the further out option premium decreasing over time which increases the likelihood of locking in losses by buying OTM premium. All of these factors make long LEAP options especially difficult to make money in.