LEAPS strategies

LEAPs have been shown to not produce market beating risk adjusted returns. You’re wasting your time. Focus on futures with put hedges instead.

About 10% of my port is leaps. Strategy is simple, I buy in the money calls more than a year out and treat it like leveraged stock. The stocks I buy are strong but feel suppressed. I’m generally looking to make decisions about the position about 1/2 way though it. currently I have, Microsoft, which is up 175%ish, and is being closed soon, and Google, which has gone nowhere, and will likely be rolled another 6 months.

Thxs for this! How do u determine when is a good time to buy the leaps? From what I understand sometimes the extrinsic cost is high and not worth it.. I’m stuck at this part…

Sounds like for "good time" = low-ish price AND low volatility (IVRANK) MarketChameleon can help with that https://marketchameleon.com/Overview/NVDA…

NVDA implied volatility (IV) is 38.2, which is in the 40% percentile rank. This means that 40% of the time the IV was lower in the last year than the current level. The current IV (38.2) is -6.0% below its 20 day moving average (40.6) indicating implied volatility is trending lower.

https://marketchameleon.com/Overview/TSLA…

TSLA implied volatility (IV) is 37.1, which is in the 0% percentile rank. This means that 0% of the time the IV was lower in the last year than the current level. The current IV (37.1) is -16.7% below its 20 day moving average (44.6) indicating implied volatility is trending lower.

Seasonality may also come into play - in recent years, buying EV leaps (TLSA, RIVN) in Sept/Oct pullback, holding through the Nov/Dec/Jan rally, and then selling late Jan/Feb worked out well

Thanks I’ll check it out !

Pelosi would be proud

Weird, I do the opposite... I wait till something is really beaten down (typically SPY -- think April this year) or another value stock (Google/APPL/AMZ, etc.), then buy 1-3 trenches way OTM calls at least a year out, then sell CC's on that position.

That’s interesting .

how much do you pay to roll it

Good but no mention of IV. What is your acceptable range for IV? Given that LEAPS can get change price really fast with any IV change

leaps (>=12 months) are not as sensitive to short term volatility events. a 7dte stock covering earnings could be in the 70% IV, the 12 months one could bein the 20-30. what you buy with leaps is a stock replacement with very small theta and lower vega

LEAPS on stable ETFs, and LETFs on stocks (especially if volatile) generally. Delta is a key ingredient but not the deciding factor; leverage is. Try for 3x leverage on stock LEAPS and 5x leverage on ETF LEAPS otherwise you're paying a big premium for it.

Spreads: Buy Deep ITM LEAP, sell OTM Leap - sometimes same expiration date, sometimes sooner.

What does this do?

I prefer the **Poor Man’s Covered Call (PMCC)** with LEAPS. I typically buy a deep-in-the-money call with around 0.75–0.85 delta and 12–24 months until expiration, ideally on a liquid underlying I’d be comfortable holding long term. Against it, I sell shorter-dated calls—usually 30–45 DTE—with roughly 0.20–0.30 delta. The goal is to collect premium while leaving enough upside room for the LEAPS position. For rolling the LEAPS, I generally avoid waiting until the final months. I’ll usually evaluate rolling when there are about 6–9 months remaining, especially if the LEAPS delta has fallen materially after a drawdown. If the underlying has risen sharply and the LEAPS has captured a substantial gain, I may roll up and out to lock in some gains while restoring a higher delta.

For stock replacement, a common starting point is a deep-ITM call around 0.70–0.85 delta with 12–24+ months remaining. I’d also compare the bid-ask spread, open interest, implied volatility, and extrinsic value rather than choosing by delta alone. There isn’t a universal roll date or profit target. It makes more sense to reassess periodically and roll when the thesis remains intact but the current contract no longer offers the exposure, duration, or capital efficiency you want. For a PMCC, you also need to manage the short call carefully because it can cap upside and create assignment risk.

I’ve been trading LEAPS that last couple of years and am up 300% this year. ( but obviously want to point that growth isn’t sustainable. ) 100% of my port are deep ITM LEAPS (.70 Delta +, 365 DTE). I mainly trade high beta growth stocks (NBIS, RKLB, ASTS). You can buy lower beta stocks if this amount of risk doesn’t suit you but my overall rules are: \- Buy during times of intense fear using the CNN Fear & Greed Index \- I only trade stocks with high liquidity to track key catalysts over the year and map out their implied % move \- Keep cash aside to buy stocks after huge pull backs where the stock is falling under the 200 SMA but the fundamentals are still in tact The only 3 rules I have for selling at a loss: \- The fundamentals of the stock have been broken and have changed for the worse \- I need the cash for a better opportunity \- I need the cash for life ( this one should never happen but is a default rule) Besides those rules, if I’m in profit my rules for selling are: \- Catalysts have just passed and a quiet zone is coming up \- parabolic extension has just happened \- Stock is hitting 6 monthly highs (since I want to be out of my position inside my year time frame and reset) \- Basically I use the key catalysts as my reason to get in, and if they fail, I have the ability to hold for the next year before I need to sell Ultimate rule \- No matter what, I always sell 3 months before expiry to avoid the final theta decay window (this burns the most) Also I want to add that hedging using an ETF that correlates with your stock selection is also a great way to avoid huge drops during pullbacks (like the recent couple of months) Idk if that helped much but feel free to DM me if you want any more info. Happy to help where I can

if I think a share is going up then I buy leaps

I buy ITM or Deep ITM. 1.5 to 2 years. I sell at a profit target, which is typically 50-60%. I don't care about timeframe when selling. I had LEAPS in the past which reached the 60% profit in 3 months only, so I sold.