LEAPS OPTION TRADING Strategy (What is a LEAP STRATEGY & LEAPS Call Option



I Tried The Best Option Trading Strategy | Buy LEAPS Instead of Stocks for BIGGER PROFITS
? Join my Patreon to get access to all my Live Trade Alerts, Open Orders and Weekly Top 5 Stocks:

? Subscribe for free stock and option trading tips:

? Purchase My Spreadsheets (as seen in my videos):

⏰Chapters ⏰
0:00 Intro
1:29 What are LEAPS options
2:06 LEAPS options vs Short term options (Theta)
5:23 LEAPS options vs Stock (Delta)
7:59 Positives & Negatives of LEAPS Options
8:26 How to generate cash flow LEAPS options/Poor Man’s Covered Call
10:59 My DIS LEAPS Call Option Cash Flow & Return

? Get a copy of my eBook “New Beginnings: The Option Trading Story” ?

? How do LEAPS Options Work Video:

? Option Trading Monthly Cash Flows Playlist:

? Watch Next — Trade Options Like a Pro:

Website:
Instagram:

#leapsoptionswork #whatisaleapscalloption #whatisaleapsstrategy

Today I’m going to show you how you can use LEAPS call options to achieve tremendous returns and awesome cash flow! I’m going to share with you some of the negatives but also the positives of using a LEAPS option trading strategy.

LEAPS call options are simply a long-term call option. It’s an option in which the expiration date is over one year. One of the biggest challenges of being an option buyer is that time decay eats away at the value of your option. Time decay is one reason why, if I buy options, I do not buy short term options. I buy LEAPS options.

Using LEAPS options is a special tool we can use as option traders to benefit from stock movement at a fraction of the cost. One word of caution though in buying LEAPS options is that you want to make sure you totally understand how they work. You can completely lose the value of the option you buy if you are still holding the option at expiration day, and in the case of a call option, the stock price is below your option strike price.

Next we are going to talk through how we can generate monthly cash flow using LEAPS call options. Many people are familiar with the covered call strategy, were you own a stock and sell a call option against that stock. The exact same thing can be done using a LEAPS option. This is also known as the poor man’s covered call. But as you’re going to see, just because it’s called a poor man’s covered call, it doesn’t mean the returns are poor.

Let me show you exactly how much cash flow we have generated in our Disney LEAPS option position as well as our current return. Here it is!

?BOAT DRINK MONEY DONATIONS?
PAYPAL:

Disclaimer: Everything contained in this video, related website, newsletters, training videos and training courses (collectively referred to as the “Material”) has been written for the purpose of teaching analysis, trading and investment techniques. The Material neither implies to be, nor is it intended to be, advice to trade or to invest in any financial instrument, or class of financial instruments, or to use any particular methods of trading or investing. Advice in the Material is provided for the general information of readers and viewers (collectively referred to as “Readers”) and does not have regard to any particular person’s investment objectives, financial situation or needs. Accordingly, no Viewer or Reader should act on the basis of any information in the Material without properly considering its applicability to their financial circumstances. If not properly qualified to do this for themselves, Readers should seek professional advice. Investing and trading involves risk of loss. Past results are not necessarily indicative of future results. The decision to invest or trade is for the Viewer or Reader alone. We expressly disclaim all and any liability to any person, with respect of anything, and of the consequences of anything, done or omitted to be done by any such person in reliance upon the whole or any part of the Material.

AFFILIATE DISCLOSURE: Some of the links on this webpage are affiliate links, meaning, at no additional cost to you, we may earn a commission if you click through and make a purchase and/or subscribe. However, this does not impact our opinions and comparisons.

COPYRIGHT: All My Life of Learning’s videos, Excel files, guides, and other content are (c) Copyright My Life of Learning.

Related Posts

21 thoughts on “LEAPS OPTION TRADING Strategy (What is a LEAP STRATEGY & LEAPS Call Option”

  1. ►► AVAILABLE NOW! Limited to the FIRST 100 people, get my brand new online Option Trading course (Intermediate option trading) for $497. Regular price is $997. Here is the link to check it out: https://mylifeoflearning-randy.mykajabi.com/offers/EgeavtWJ
    Subscribe to this Channel: https://www.youtube.com/channel/UCeUPN22CHOgoDTZ4QfOjxHw?sub_confirmation=1
    Join my PATREON and get access to my WEEKLY TOP 5 STOCKS, DAILY TRADES & more Awesome Extras: https://www.patreon.com/mylifeoflearning
    New Beginnings: The Option Trading Story https://amzn.to/2OgXx58
    Facebook: https://www.facebook.com/jamiston.queens.5
    Website: http://mylifeoflearning.com/index.html

  2. WOW, I wish I had found you 2 years earlier but you do exactly what I have been trying to do with some success but not nearly enough as I have also made mistakes. My lifetime goal is to have enough in my account to create weekly income to live on. My account size is 250,000 but my margin is about 130,000 and I want to reduce my margin as much as possible. Any suggestions on the best way to reduce margin. Thanks. Love your videos.???

  3. Randy, appreciate this video but wish the pace was slightly slower. Perhaps a little more chart, graph time would help instead of face time.
    So, how can beginners learn this strategy? While this video piques interest and demonstrates the power of the technique, it certainly does not enable one to have the confidence or knowledge to perform it.
    Are there parameters for identifying a suitable stock where this method is especially suitable?
    How do I analyze this method and have the knowledge to minimize risk should the stock movement go against me? How would I exit this type of trade and when?

  4. Great video! You're my new favorite options youtuber. Thank you!

    Quick question if you don't mind… as for selling LEAPS Puts (I saw in another of your videos), how often would you expect to be assigned on those deep ITM Puts? Thanks again!!

  5. Thanks for your content! So the best outcome you are expecting is all the covered calls in between all expired which leaves you one leap buy option and a naked call option (which at this time becomes covered call since all covered call before it all expired)? I am just trying to figure out why pair pmcc with a naked call VS naked call alone VS pmcc alone.

  6. Randy. I have a question about your position (10:28). You bought LEAPS call at strike $85 (ATM) on 3/20/20. On 3/20/20 the DIS was around $85. Was there any reason you bought ATM instead of Deep ITM? As far as I know, LEAPS call ATM experiences time decay faster than Deep ITM so you have lots of burdens to hold it for a long term.

  7. Just discovered your LEAPs videos, wonderful explanations thank you. I'm new to LEAPS and was wondering if you could explain when you would close the contract, how to roll a LEAP if that would be beneficial, and/or what conditions would be conducive to exercising the option. I have never placed a LEAP before and its the end that I don't understand how to manage. (I usually just sell puts).

  8. What if the underlying keeps declining ? My near term short calls are profitable, but I am losing on my LEAPS call ( it's 11 months out ). Selling ATM calls can get me more in premium but still wouldn't offset the losses on the LEAPS call. Should I sell my LEAPS to cut the loss or is there any other way to handle this situation ?

  9. The only thing I'm confused on is the dangers of selling the leap call with short term covered calls. After buying the leap call. I think I just need to learn more about selling covered calls/rolling options. I get your long 1 short 2

  10. Hello Randy,
    Thanks for the awesome videos; they are great especially with the wonderful practical demonstrations.
    I have a question about one of the diagonal spreads you showed in one video. I realized you attached two legs to the main leg which was a leap option. One of the attached leg was with further date and the another was with closer date. Please correct me if I am wrong. If this is correct, I am thinking to switch to interactive brokers as there is not such thing you can do on questrade which I am using now as my broker. Could you please let me know about it?
    Thanks

  11. great video Randy thanks. Question, is the objective to generate monthly casflow to take home from the Calls sold, or to reduce the cost basis of the LEAPS and take overall profit some time in the future? Do you let the LEAPS expire or have a plan to close before expiry? Thanks.

  12. I sometimes sell covered calls on long positions. And I have been selling puts on IWM. I am looking to start a PMCC on IWM using a long leap with high delta and low theta.

    Thanks for making this video.

  13. How do you determine the strike price when selling short call against your long LEAPS? do you just go above the strike of your LEAP or above your breakeven which is the strike price of your LEAP + how much you paid?

Comments are closed.