Be careful with those LEAP puts. ie SPX DEC 06 versus DEC 07. Remember you are fighting time and VERY LOW delta. .40 delta ATM compared to .30 delta ATM when comparing 3 month puts to 15 month puts. And 30 points in the money, its even more pronounced a difference: .50 delta compared to .35 delta. This difference will kill you even more if you're buying debit spreads, since bid/ask spreads are large and your sold premium will become more expensive to rebuy (just as your bought premium will raise in value). Also, LEAP premiums are high. you'll put a lot of money down to make relatively little over a long period of time. Furthermore, lets say you're right, the market tanks from an oil shock -- if you want to profit take too far before expiration, your delta won't be large enough to truly profit how you'd like. So you hold because you're waiting for your deltas to strengthen, then the political situation resolves, long term peace treaties are made (in months maybe), hybrid car initiatives pass to reduce demand, and no oil worries hang over the market, and its back to $35 by next september. The market rallies, and your 150 point drop in the SPX is now a 50 point gain (far from a super bull market, but not doom and gloom). I'd wait for some bad news, then jump on board. Sure you won't get every penny, but your odds of real profits will increase. I think you'd be better off shorting the QQQQ and protecting yourself with stops - that way you can react, or doing the same thing selling ES or NQ futures. That way you won't fight time.
I have nothing to add. To the original poster. Do what you want to do. Just make sure you journal it each day, with a table showing gamma delta theta etc as the market progresses. Write down the daily events as they happened and see how your position parameters changed with those events. You are going to learn the lesson of a lifetime. One that only the market and experience can give you. Even if you lose, you will win because of it. nitro
by the way, roubini's interview is on front page of bloomberg.com. This guy is as sharp as a tack. He's on point - no hesitation with every question. His comparisons to the 2000 recession are insightful.
No need to be so dramatic. If you're right about this, you'll have a hard time likely getting a job as a corporate slave, though. With this attitude, be careful. Its harder to do well if you expect to fail. This may belong in the psychology area. Why don't you just daytrade it with future contracts instead of having to fight with the difficulty of options ? That way you can take many bites out of this thing when it actually does pop.