How do LEAP Options Work (LEAP Option Trading Strategy) WHEN should you BUY a LEAP Option

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⏰Chapters ⏰
0:00 Intro
0:56 What are LEAP Options
1:46 Why are LEAP Options better than buying non-dividend paying stocks
4:45 Benefits of LEAP Options
7:09 How Can we do Better then just buy LEAP (2 ways)
7:48 Sell LEAP
9:42 Sell Short Term Call Option
11:14 My Current LEAP Position in DISNEY

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Why is owning LEAP Call Options better then owning non dividend paying stocks? How do LEAP call options give you all the upside of owning stock BUT minimize your downside loss? How can you generate monthly cash flow on LEAP call options?

LEAP options are simply a long term option on a stock.

You can buy Long Term LEAP options on many of the big name companies people are interested in including: Tesla, Boeing, Amazon, Facebook, etc.

Let’s look at example:

Boeing – assume you wanted buy Boeing because thought stock going up. 2 choices:
• buy stock outright OR
• buy LEAP Call option.

Look at an example. The longest or farthest dated option is the one that has the most time until it expires is circled here in red and it expires on June 17, 2022, in 729 days.

The reason we want to go that far out is because your option will decrease in value slower the farther out you go in time to expiration. Generally when I buy a LEAP I like to buy them about midway between where the stock is currently trading and zero.

7 things that make up the price of an option: the underlying stock price, the strike price, type of option, how long until option expires, current interest rates, dividends & volatility.

What want focus on Delta. Delta tells you approximately how much this call option’s value will increase or decrease.

Now how can buying a LEAP call option protect your downside?

LEAP options give you tremendous protection to the downside while giving almost 100% upside benefit.

But how can we do better? I’m going to show you to 2 ways. Selling LEAP covered by your long LEAP & or Selling short Term calls options for monthly cash flow.

Share example LEAP option strategy I'm trading right now in DISNEY.

#leapoptions #whatareoptionsintrading #leapoptionswork

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Disclaimer: I am not a financial planner and am not offering investment advice. This is an opinion channel only and should not be taken as any form of financial advice. The ideas and strategies that I discuss should never be used without first assessing your own personal/financial situation, or without consulting a financial and/or tax professional. There are financial risks involved in taking on any monetary transaction that I discuss in my videos. I may receive a small commission from the purchase of any item from using the links listed above.

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