Adam thought about leaps, then he thought about telling us. I have to say this is one guy who doesn't need youtube to make money, and I really appreciate his breakdowns on options.
@@phil7394 typically you sell 2 months before expiration. When he said let them die , he was referring to if you are down -75% no need to sell it then. As he showed it’s still a possibility it can recover. If it does sweet, if it don’t. Oh well let it ride out.
Good video once again. I’ve been all over LEAPS for the last year. You’ve got a talent for just hanging out and chatting while still keeping it interesting and educational. I’ve got shares and LEAPS on your channel.
Same. I love LEAPS and PMCC lol. Even during corrections i just hold them. I have LEAPS on AAPL that i just bought them. My break even is 134.18 by June 2022 lol. I can definitely risk that for Apple 😂
I am constantly AMAZED by the value of the content on this channel. To give this information so freely, and openly is the mark of someone I'm happy to know and follow. You're a stand up guy, and I appreciate what you've got going. You're the anti-guru.
At 10:44 Adam gives one of the best diamond hands speeches I’ve ever heard! “Cutting your losses is stupid! We don’t cut our losses! We let our LEAPS die with honor and dignity!”
@@pínnedbyÇryptoBén Look at 1st Corinthians 6 : 9-11, and Revelation 21:8. The Bible says liars and thieves will be tormented in Hell for eternity. You will stand before God one day and give an account for what you have done. Since you’re trying to scam people out of money, what will you say when it’s your turn to be judged by an infinitely holy God?
The only downside to leaps is no instant gratification. Plus, for the faint of heart, it can be torture watching the option go up and down in value daily knowing there's an expiration date (even if that date is far off into the future).
I rewatched this video after about a year. I love the way you explain the concept. I wanted to click on the like button, but I already liked it in the past 😄(and, of course, subscribed to your channel a long time ago). Keep up with the good work! I know you are going through some stuff, good bless you!
Adam, I don't know how many times I've commented saying thank you for the information you provide on this platform. I've learned so much about options from you. You're a rare bread. No BS. No course marketing. Thank you x 100!
Just for reference, the amount of time from the COVID crash to the break even recovery point in the markets was a historic statistical outlier. In other words, for all other crashes it just doesn’t recover so fast. Could the FED do it all again next time? Well, they can’t drop rates much lower at the moment. Vast majority of major market crashes (20% of more) were not back to that point in a couple months but rather a couple years, others even longer.
@@scottreesetradinginvesting7936 and widening the gap in the wealthy and lower class , too in the process, don't you suppose? Or i should say, all those people who were smart enough to put money into the markets are benefiting, yet the every day Joe with no investments, is wondering why all of a sudden his groceries and gas costs substantially more.
Completely agree with the not cutting your losses. I have seen SOOO many options sink to worthless, only to fly back up near expiration and sometimes even day of... My rule: dont even make the purchase if you ain't willing to lose. That makes my stop loss my price of entry. Love what you're doing my man. Keep the vids coming 🙏
This is how I'm going to start diversifying. I've traded options once recently for the first time, and got crushed by theta. I'll be buying one or two contracts into leaps. I had planned to do this after the theta situation, i didn't realize there was a name to this.
The V recovery was a very rare event and there's no reason you can't re-enter your position when the dust settles from a dive like this. Like the idea and instrument; just not crazy about the risk management strategy. Great video.
Traders, what's the downside to having say 80% of your holdings in leaps expiring in December 2023. Almost 3 years out. Stock would be QQQ, TQQQ, AAPL, SPY and maybe that expensive as AMZN. I know they could expire but the chances of expiring worthles?
You can sell to close (assuming there's liquidity) at any point before expiration, or you can exercise and buy your 100 shares at the strike price, also at any point before expiration.
Spot on why I love them, they are basically a tree that needs no water & if it produces fruit great, if not oh well. Lost it totally when you said "Jeromey-poo."
Adam's hold it and let it die. Is actually pretty good advice you will see some gnarly swings but just say I'm going to hold and no matter what. I had contracts going down -40% then 60% then 70% and I said I don't care. Then it shot back up to %150. So just consider that money you used to buy the option was potentially lost. But another piece of advice I've learned is if you buy a year option and you are up like 30-40% then sell out and open a new one. Is this called rolling I don't know. But my point is you may loose a small amount of money in the spread through the process but what you want is as much time as possible. I can't tell you how m any times I've been kicking butt for like 9 months then is goes in the crapper because someone tweeted something negative and it doesn't have time to return before expiration. Had I sold it and bought the same thing but longer I would have more time to make up for that new bad news. Holding for the year is good but don't be afraid to either take the money and run or just roll out to a later expiration so you can start the year over again.
Adam, will you please do a video on rolling options? Would be great to learn the advantages of rolling CC & CSP, when the ideal time prior to expiry is, how you calculate your ROR for each trade and if you could show a comparison of rolling options vs letting them expire. Thanks bro, you seriously have the best options tutorial videos!!! 💥💥💥👊
Arguably the best youtuber in options - a must follow - the value in these videos is worth more than the capex of your computer and the opex of your wifi.
New to the channel. Great stuff but you never say when you sell the leaps. Do you wait until expiration and exercise them or sell them sometime before that?
I'm new to selling puts. Made some nice premiums and none are ITM. Expiring 05/21/21. Never heard of LEAP. I'm excited to learn this strategy. I have no idea how to even start. Gonna watch this video over and over. Thanks for making videos.
Ok, so total Noob question warning! I started dabbling with options about a month ago selling CCs and CSP (Wheel). I’m liking what I’m seeing about LEAPS, but one thing no one really explains and I’m kinda confused on is how you make money with LEAPS. You bought it (paid out money) so if it expires, how to do get the money back you bought it with plus that 174% return. How do you realize a profit on a LEAPS? How does that 174% return put money back into your account at expiration? I’ve seen using them for a PMCC, but that confuses me too as to what happens if your short CC gets assigned. What happens to the LEAPS in assignment of a PMCC and where is the profit there? Hope these Q’s make sense. Thanks for all the great content encouraging us to keep pursuing that pot of gold 🌈
How deep in the money do you buy it? At what point do you sell it? This is of course hindsight trading. Anyone can win that way. The market now is overbought because of the low interest rates. I would only buy call leaps when the company at this moment in time is a good and has a cheap stock price compared to its intrinsic value. Like Alibaba for instance.
How is it that this video has half the views that you have subs, this is literally the gold standard on your Channel, I have probably watched it five times.
Keep in mind that LEAPS usually have pretty wide spreads. That's the only thing I don't like about LEAPS, but the leveraged returns are worth paying the spread imo.
Good video. the only thing I would add is, like you said buy in the money but buy a strike with either the most or a lot of open interest or the you can get pretty screwed by the market maker. You can also sell calls against your position to lower your cost basis. You can also scalp Gamma. Look at your LEAP as 100 shares. Lets say the stock makes a nice move up, you can short 25 share for example... if the stock keeps going up, so what, you're still long 75 shares, but we know stocks don't go straight up so when the stock pulls back close your short and scalp a little money... all the while without ever touching you call. My goal with LEAPS is to try and reduce my cost basis to 0 and give myself a freebie
How do you get rid of a LEAP at the expiration time if it's so deep int he money? Who would want to buy that? You can exerciser your option and then immediately sell the underlying stock i guess.. I'm trying to understand the end game, will there be a problem closing a LEAP order if it's so deep in the money? As an example, in my paper trading I bought SPY LEAP back in May of 2020 right when recovery started and it's up over 260% now. In the real world, will I be able to close this LEAP option or I'll have to exercise my order?
You are right on, after 20 years of trading, almost all I do is buy long dated calls,...LEAPS on good but beat down commodity stocks also now some of the Tech's. When oil was sub $30 a couple of years ago I loaded the wagon with WTI pure plays, some like OXY, APA, MRO have gone 20X. Did the same thing with Iron Ore thru VALE, also ET I got in with LEAP when it was $8.00. My biggest problem is I get out to damm early. You delivered a great video with enthusiasm & conviction. Stadtmueller Von Texas
The longer I've been in the market, the more this is so true. Almost all my LEAPs are in the green, but only a rare few short-term options have even been ITM.
Whew, thank God it's the weekend. I sold my "LEAP" after realizing I can sell options (yup, I just realized I can sell options and don't have to hold on to it till expiration), but then I watched THIS video again! Cancelling sell and waiting for SNDL to go up in....the next 3 months.
Hey Adam, great video. A few questions I've been debating about using LEAPS and selling Poor Man's Covered Calls against the LEAPS: IF your sold calls go in the money, aren't you kind of screwed? The calls you sold going to be more sensitive to vega and gamma (of course) than the LEAPS (which has minimal extrinsic value and thus isn't much affected by vega and gamma), meaning they will expand in price MUCH faster than the LEAPS, making it so not only you cap your upside in intrinsic value (as any covered call would) you also lose far more in extrinsic value in the calls you sold than what you gain in extrinsic value on the LEAPS. There's an even bigger problem - the LEAPS will have a lot of slippage because the expiration is so far out there will be low liquidity (relatively), meaning if the expiration date for your sold call is approaching you may need to sell your LEAPS for an unfavorable price to cover your costs on the sold call. Having said all of that, if you have a LEAPS and you're doing PMCCs, should you ever close the position or just roll the covered call and eat the loss because of all of those factors?
@@spoonman73 A calendar spread. ex: Apple is trading at 160$. I buy an aapl 160 call that expires in January of 2023. Then sell OTM calls against at a shorter term month. It can bring your cost basis down, but personally I think it caps your gains. You could always buy back the option you sold for a loss, if you feel as though the stock will continue to trade higher.
@@IAMJERM That is true. Would need to do a good bit of math to figure out at what point it is worth it, especially if using an LLC for taxes. I don't look forward to calculating that one day lol
Ty for this great video! I have a question: at 08:30 you say to never sell a leap. I do have to sell a leap sometime on or before the expiration date though, right? if this is correct, when do i do so? would be much appreciated if someone could give me advice on when to sell leaps (aka "close" that position).
thanks for this. There is not much practical info on LEAPS on TH-cam. I like deep in the money SPY LEAPS and then roll them. You are getting about 99% delta and maybe 3:1 leverage on cash. Using only 33% capital, I get pretty much the same as 100% in SPY but a whole lot of cash reserves to sleep at night. Also, the boost from IV gives a little crash protection...convexity is king!
if the stock pumps really hard or if the IV is extremely high compared to the average.. thats a good time to probably enter some CC's. make sure the premiums are at a higher price and worth it. people probably shoot for around 20 delta area ... when you are picking the strike you want.. 30 if you are greedy and dont mind being wrong and giving up your ITM leaps
Do you exercise your LEAPS when they are ITM at expiration? Or do you just sell the LEAPS close to expiration? I mean exercising would require more capital and selling the shares to buy more LEAPS again would cost in transaction fees? Ty!
@@scottreesetradinginvesting7936 Okay ty! I live in Denmark where most brokers still charges a transaction fee. I guess ill just sell the LEAPS near expiration then
I’m about to purchase DWAC deep in the money Leaps expiring Jan/2023. Price is 70.00 now, 30,40? Or just get the cheapest 70+ delta? I need your help on this Adam
Is there a risk of your broker closing your position OTM if the underlying security crashes too hard? Or can that only happen if you buy the leap, call, put or whatever on margin? Kinda new to this options trading thingy.
Greetings investor, this is very insightful content however personally I feel those who would allow the market dynamism determine when to trade or not are either new in stocks/cyptocurrency world in general or probably is just naive, stock and cypto currencies have seen far worse time then this, Enlightened traders continue to make good use of the dip and pump even acquiring more equities towards trading sessions. I know doing Technical Analysis can be quite difficult which is why most newbie/ traders neglect day trading their coins and stick to hold which is dangerous as when the market goes bearish, they loose their investments. The strongly advise any newbie gets to buy the dip and seek help from not just any trader but an established trading expert with the least 90% accuracy. I underwent series of trading loses, I guess this is a good way to show my heartfelt appreciation to Mr Marcel for literally breaking his mind strategy when I needed it the most. My contact with him has been hallmark of this year for me, under his careful guide and his signal service I’ve been able to recover my losses and even grow my trading portfolio massively from $18K to $50k in just 5 weeks. I will advise traders especially newbie to have orientation on trading before they involve in it. Mr Marcel makes you learn daily while you make profit with his signals. Mail him now... (Marcelfredric@gmail .com)
i like how you laid out this video and didn't even mention selling covered calls on your LEAPS. your chan gave me the courage and knowledge to pursue LEAPS and Covered Puts, thanks for all the effort
So I have a GE leaps $50 call option 1/19/24 exp. It is now a nonstandard option due to the GEHC spinoff. Says it's worth 100 shares of GE and 33 shares of GEHC no cash in lieu of shares. What are my options with this? Not sure if I can sell it. Should I exercise and take the shares? I'm +$1600 on it, just not sure how to handle this situation. There will also be more spinoffs from GE so I'm wondering if I should just hold on for the ride?
Personally I'm into selling leaps. Covered calls with years to expiration while a stock is at an all time high usually give you a good amount of time when all you need is 1 red day and you can collect thousands in premium upfront
Adam, I am curious if I can use LEAPS for leveraged etfs and avoid some of their downsides? They usually have very good 5 years charts and they are very liquid and cheaper than popular etfs.
Options on leveraged ETFs often have higher extrinsic value, so you're paying more upfront for the leverage (and for good reason, they can easily explode). If you're already okay with buying that many shares into a leveraged ETF, a leap can be a great tool, but just remember that you're paying a little more in terms of extrinsic value for it, compared to regular old SPY.
Great video indeed, thank you! I thought about it a little, playing with LEAPS for a while, is it a good idea to buy a LEAP, when seeing a stock that dipped in 25% percent for example, and protect that LEAP with a weekly OTM put in case the stock continues to dip?
An OTM out is a perfectly respectable hedge. I’d do further than weekly though because if the stock tanks later in the week it may be too late for the OTM out to be a useful hedge because too much value has decayed. Just my opinion.
This is exactly what I needed to see after the AAPL drop today. Begs the question though - when do you actually sell the LEAP? Is there a target percent gain or days to expiration?
@@chossmedia As the underlying keeps rising, your LEAPS delta get closer to 1. It then behaves like a stock. You have no real rush to sell or exercise until you’re very close to expiration. If you continue to be bullish on the underlying and want to continue leveraging, you roll out by selling your current LEAPS contracts and buy further dated calls. You do this when your delta remains close to 1 and the underlying drops in value so that your next LEAPS contract benefits from cheaper options pricing.
Finally someone that shares my views. I use LEAP options but I buy DEEP in the money. LEAPs and selling puts are my only options trading. Take it to the next level and explore DEEP in the money LEAPs. I WILL sell LEAPs under certain conditions. I preemptively set limits order to execute if the option has significantly over performed at the 6 month, 12 month, or 18 month. Not only that, having those limit orders on the books have allowed me to get filled on really stupid IV jumps.
Hey thanks for your videos. As a new trader getting wrecked on options the last 3 months, since ive found you i have a better approach and have done well on options since.
I'm a noob with all the greeks, but I like selling long dated puts around 10 bucks higher than share price if the stock has fallen below 30 RSI, then using that cash to stagger several long dated calls on growth companies, especially mid caps breaking into profitability. I need to watch this channel more to understand the Greeks and get a clue what's going on mathematically lol. I appreciate the wealth of information you give.
Bruh, 80% of my IRA is in a single contract. AMZN 2400c, Jan '23. I bought it as a 2500c in Jan with a Jan '22 exp and sold CC's above my break even. Made 2k a week just selling calls. When it dipped hard in March, I used the cash to roll it down to 2400 & out to 23. Leaps are the cheat code. Once the Jan '24 options are available, I'll use the cash from CC's to roll it down & out again, if they don't do a split before then. Go deep, like .95 delta and at least a year out on something you really believe will increase in value, never sell a call below break even, and it's hard to go horribly wrong.
thanks for your videos. I'm learning a lot. you give very clear explanation. what is the return to date if you bought at the bottom, , instead of the top? .
Are there any safeguards to guarantee you will be able to sell the contract assuming you’re deep in the money but closing in on expiration? (I.E only trade high volume stocks?) Will somebody want to buy the contract because they could then purchase the shares at the strike price presumably much lower than the now market price?
I love your videos. You have great content and explain it so well. I have a question, how do you but a LEAP. Is it just an Option with a late expiration date?
Most people have a beer or two and start thinking about the ones they've loved the most. Adam thinks about Leaps.
He loves LEAPS
I've made some of my best plays after a few beers 😎🍺
Let's start the term "LOTA" for Leveraged Out The Ass. Like: That guys account is totally LOTA
Adam thought about leaps, then he thought about telling us. I have to say this is one guy who doesn't need youtube to make money, and I really appreciate his breakdowns on options.
Because that's who he loves the most
I really like how your channel has no marketing gimmicks or filler info its just purely straight to the point with valuable information.
that’s why i love it
“If our leaps die, we let them die nobly.” Haha so true. Love it
I cried one time
@@phil7394 typically you sell 2 months before expiration. When he said let them die , he was referring to if you are down -75% no need to sell it then. As he showed it’s still a possibility it can recover. If it does sweet, if it don’t. Oh well let it ride out.
Good video once again. I’ve been all over LEAPS for the last year.
You’ve got a talent for just hanging out and chatting while still keeping it interesting and educational. I’ve got shares and LEAPS on your channel.
Thanks man, always a pleasure and honor to see Mikey Millions in the comments. 🍻
Mr millys in the house. An OG comment reunion
Did you say 10% of the port into leaps? Oops. Thought you said 100%..
This is me with my portfolio but unironically
@@logknot7867 same lol
@@logknot7867 Same
honestly it still better than scratch offs or a visit to the casino.
Same. I love LEAPS and PMCC lol. Even during corrections i just hold them. I have LEAPS on AAPL that i just bought them. My break even is 134.18 by June 2022 lol.
I can definitely risk that for Apple 😂
You had me at “You could be a complete donut”💀
He must watch a lot of Hell’s Kitchen
Im hungry now
I am constantly AMAZED by the value of the content on this channel. To give this information so freely, and openly is the mark of someone I'm happy to know and follow. You're a stand up guy, and I appreciate what you've got going. You're the anti-guru.
F•O•R C•R•Y•P•T•O G•U•I•D•I•A•N•C•E A•N•D I•N•V•E•S•T•M•E•N•T
W•H•A•T•S•H•A•P•P.....
+•1•6•0•1•3•4•8•7•7•2•0•.....
@@pínnedbyÇryptoBén the
At 10:44 Adam gives one of the best diamond hands speeches I’ve ever heard! “Cutting your losses is stupid! We don’t cut our losses! We let our LEAPS die with honor and dignity!”
F•O•R C•R•Y•P•T•O G•U•I•D•I•A•N•C•E A•N•D I•N•V•E•S•T•M•E•N•T
W•H•A•T•S•H•A•P•P.....
+•1•6•0•1•3•4•8•7•7•2•0•.....
@@pínnedbyÇryptoBén 🚨SCAM ALERT🚨
@@pínnedbyÇryptoBén Look at 1st Corinthians 6 : 9-11, and Revelation 21:8. The Bible says liars and thieves will be tormented in Hell for eternity. You will stand before God one day and give an account for what you have done. Since you’re trying to scam people out of money, what will you say when it’s your turn to be judged by an infinitely holy God?
As someone who buys OTM weeklies I felt this video. TY sir you’re a gentleman and a scholar and your videos are insightful and helpful
ooooof. single leg out of the money weeklies.... the inverse narrative still alive and well making the rich people richer :D
why are OTM weeklies bad?
The only downside to leaps is no instant gratification. Plus, for the faint of heart, it can be torture watching the option go up and down in value daily knowing there's an expiration date (even if that date is far off into the future).
😂
As an options trading TH-camr, this is the only option channel I watch because I'm still learning when I watch these video.
Fuck Ya! My Boy Henry! Plus, if you're DEEP ITM you can sell some nice Covered Calls on the Leaps. Profit all ways
This dude’s the truth man
This is the way
i literally unsubbed to u because of ur annoying as fk thumbnails
checkout the come up series.
The best part about LEAPS is that you get to sleep easy lmfaoooo
Lmao ain’t that the truth!!!
He even said don’t put in more than your willing to loose lol
Facts
I haven't slept in years
Oh what I would give for sleep
I rewatched this video after about a year. I love the way you explain the concept. I wanted to click on the like button, but I already liked it in the past 😄(and, of course, subscribed to your channel a long time ago). Keep up with the good work! I know you are going through some stuff, good bless you!
An excellent example of a LEAP. Thank you for making it clearer!
Adam, I don't know how many times I've commented saying thank you for the information you provide on this platform. I've learned so much about options from you. You're a rare bread. No BS. No course marketing. Thank you x 100!
Just for reference, the amount of time from the COVID crash to the break even recovery point in the markets was a historic statistical outlier. In other words, for all other crashes it just doesn’t recover so fast. Could the FED do it all again next time? Well, they can’t drop rates much lower at the moment. Vast majority of major market crashes (20% of more) were not back to that point in a couple months but rather a couple years, others even longer.
@@scottreesetradinginvesting7936 and widening the gap in the wealthy and lower class , too in the process, don't you suppose? Or i should say, all those people who were smart enough to put money into the markets are benefiting, yet the every day Joe with no investments, is wondering why all of a sudden his groceries and gas costs substantially more.
Ladies and Gentlemen, may I present the easiest to understand TH-camr when it comes to trading techniques. Adam breaks it down so easily
Cuz he's the GOAT. 🐐
Your desk set up is clean brother
🚨🚨scam alert🚨🚨🚨
Completely agree with the not cutting your losses. I have seen SOOO many options sink to worthless, only to fly back up near expiration and sometimes even day of... My rule: dont even make the purchase if you ain't willing to lose. That makes my stop loss my price of entry. Love what you're doing my man. Keep the vids coming 🙏
T>e>x>t >m>e
+,⑴ ⑵⒪⑻ ⑷⑷⑹ ⑵⑼⑻⒪
This is how I'm going to start diversifying.
I've traded options once recently for the first time, and got crushed by theta.
I'll be buying one or two contracts into leaps. I had planned to do this after the theta situation, i didn't realize there was a name to this.
The V recovery was a very rare event and there's no reason you can't re-enter your position when the dust settles from a dive like this. Like the idea and instrument; just not crazy about the risk management strategy. Great video.
Never look leaps with this real approach. Great presentation bro . Thanks for sharing
You have been the best source of education on this market in the entire internet. Thank you.
Traders, what's the downside to having say 80% of your holdings in leaps expiring in December 2023. Almost 3 years out. Stock would be QQQ, TQQQ, AAPL, SPY and maybe that expensive as AMZN. I know they could expire but the chances of expiring worthles?
Going down with the ship. I like this approach to letting LEAPs expire
Your videos got me a derivatives trading internship. Thanks!!
You don't need an internship to lose money.
What is that?
Interest rate derivatives?
@@slizzmo RV trades
I agree with you 100%. I decided a few months ago to not purchase any calls that expire in any time frame less than 6 months. Much less stress
@inthemoney would you consider doing a video on endgame scenarios for LEAPS that are doing well? How do you book the profit on your winners?
You can sell to close (assuming there's liquidity) at any point before expiration, or you can exercise and buy your 100 shares at the strike price, also at any point before expiration.
Spot on why I love them, they are basically a tree that needs no water & if it produces fruit great, if not oh well.
Lost it totally when you said "Jeromey-poo."
Adam's hold it and let it die. Is actually pretty good advice you will see some gnarly swings but just say I'm going to hold and no matter what. I had contracts going down -40% then 60% then 70% and I said I don't care. Then it shot back up to %150. So just consider that money you used to buy the option was potentially lost. But another piece of advice I've learned is if you buy a year option and you are up like 30-40% then sell out and open a new one. Is this called rolling I don't know. But my point is you may loose a small amount of money in the spread through the process but what you want is as much time as possible. I can't tell you how m any times I've been kicking butt for like 9 months then is goes in the crapper because someone tweeted something negative and it doesn't have time to return before expiration. Had I sold it and bought the same thing but longer I would have more time to make up for that new bad news. Holding for the year is good but don't be afraid to either take the money and run or just roll out to a later expiration so you can start the year over again.
Adam, will you please do a video on rolling options? Would be great to learn the advantages of rolling CC & CSP, when the ideal time prior to expiry is, how you calculate your ROR for each trade and if you could show a comparison of rolling options vs letting them expire. Thanks bro, you seriously have the best options tutorial videos!!! 💥💥💥👊
Arguably the best youtuber in options - a must follow - the value in these videos is worth more than the capex of your computer and the opex of your wifi.
New to the channel. Great stuff but you never say when you sell the leaps. Do you wait until expiration and exercise them or sell them sometime before that?
u can sell them whenever u want if profitable. dont get too greedy tho
If he was to exercise he would only make the 30% return from Microsoft whereas if he sold the LEAP he would make the full 170% am I correct?
I'm new to selling puts. Made some nice premiums and none are ITM. Expiring 05/21/21. Never heard of LEAP. I'm excited to learn this strategy. I have no idea how to even start. Gonna watch this video over and over. Thanks for making videos.
I'm mostly an option seller, but the only options i'm buying to open, are ITM leaps, preferably when their cheap, around 0.8 Delta 👍
Ok, so total Noob question warning! I started dabbling with options about a month ago selling CCs and CSP (Wheel). I’m liking what I’m seeing about LEAPS, but one thing no one really explains and I’m kinda confused on is how you make money with LEAPS. You bought it (paid out money) so if it expires, how to do get the money back you bought it with plus that 174% return. How do you realize a profit on a LEAPS? How does that 174% return put money back into your account at expiration? I’ve seen using them for a PMCC, but that confuses me too as to what happens if your short CC gets assigned. What happens to the LEAPS in assignment of a PMCC and where is the profit there? Hope these Q’s make sense. Thanks for all the great content encouraging us to keep pursuing that pot of gold 🌈
How deep in the money do you buy it? At what point do you sell it? This is of course hindsight trading. Anyone can win that way. The market now is overbought because of the low interest rates. I would only buy call leaps when the company at this moment in time is a good and has a cheap stock price compared to its intrinsic value. Like Alibaba for instance.
How is it that this video has half the views that you have subs, this is literally the gold standard on your Channel, I have probably watched it five times.
Keep in mind that LEAPS usually have pretty wide spreads. That's the only thing I don't like about LEAPS, but the leveraged returns are worth paying the spread imo.
@@scottreesetradinginvesting7936 lol good point
Which ETFs do you find have the smallest spreads? That's what's eating into my profit as well
Good video. the only thing I would add is, like you said buy in the money but buy a strike with either the most or a lot of open interest or the you can get pretty screwed by the market maker. You can also sell calls against your position to lower your cost basis. You can also scalp Gamma. Look at your LEAP as 100 shares. Lets say the stock makes a nice move up, you can short 25 share for example... if the stock keeps going up, so what, you're still long 75 shares, but we know stocks don't go straight up so when the stock pulls back close your short and scalp a little money... all the while without ever touching you call. My goal with LEAPS is to try and reduce my cost basis to 0 and give myself a freebie
Man I am loving the thumbnails in the past two months
My Ford leaps for 3/18/2022 Delta is 0.97 lolololol $5 strike. Thank you Adam.
I got into LEAPS because of you, ports up 20% today too! Back in the green baby
Wtf were you in that got you 20% today 🧐 I was barely green, 90% of portfolio was red. Luckily the greens were bigger
@@carsonhunt4642 i was gonna ask the same, market took a poop but must be good strikes.
Sooo I buy a itm or otm leap call option?
How do you get rid of a LEAP at the expiration time if it's so deep int he money? Who would want to buy that? You can exerciser your option and then immediately sell the underlying stock i guess.. I'm trying to understand the end game, will there be a problem closing a LEAP order if it's so deep in the money? As an example, in my paper trading I bought SPY LEAP back in May of 2020 right when recovery started and it's up over 260% now. In the real world, will I be able to close this LEAP option or I'll have to exercise my order?
Amazing content, well thought out and your delivery of information is just impeccable
You are right on, after 20 years of trading, almost all I do is buy long dated calls,...LEAPS on good but beat down commodity stocks also now some of the Tech's. When oil was sub $30 a couple of years ago I loaded the wagon with WTI pure plays, some like OXY, APA, MRO have gone 20X. Did the same thing with Iron Ore thru VALE, also ET I got in with LEAP when it was $8.00. My biggest problem is I get out to damm early. You delivered a great video with enthusiasm & conviction. Stadtmueller Von Texas
The longer I've been in the market, the more this is so true. Almost all my LEAPs are in the green, but only a rare few short-term options have even been ITM.
Whew, thank God it's the weekend. I sold my "LEAP" after realizing I can sell options (yup, I just realized I can sell options and don't have to hold on to it till expiration), but then I watched THIS video again!
Cancelling sell and waiting for SNDL to go up in....the next 3 months.
"High frequency above the shoulders mustard shit" You are keeping urban dictionary alive with your vocab
1929 is when they invented the original LEAPS. It could happen again.
Hey Adam, great video.
A few questions I've been debating about using LEAPS and selling Poor Man's Covered Calls against the LEAPS: IF your sold calls go in the money, aren't you kind of screwed? The calls you sold going to be more sensitive to vega and gamma (of course) than the LEAPS (which has minimal extrinsic value and thus isn't much affected by vega and gamma), meaning they will expand in price MUCH faster than the LEAPS, making it so not only you cap your upside in intrinsic value (as any covered call would) you also lose far more in extrinsic value in the calls you sold than what you gain in extrinsic value on the LEAPS. There's an even bigger problem - the LEAPS will have a lot of slippage because the expiration is so far out there will be low liquidity (relatively), meaning if the expiration date for your sold call is approaching you may need to sell your LEAPS for an unfavorable price to cover your costs on the sold call.
Having said all of that, if you have a LEAPS and you're doing PMCCs, should you ever close the position or just roll the covered call and eat the loss because of all of those factors?
Great questions. What is a poor mans covered call though?
@@spoonman73 A calendar spread. ex: Apple is trading at 160$. I buy an aapl 160 call that expires in January of 2023. Then sell OTM calls against at a shorter term month. It can bring your cost basis down, but personally I think it caps your gains. You could always buy back the option you sold for a loss, if you feel as though the stock will continue to trade higher.
So when do you when do you sell Leaps? Assuming you bought with expiry 2 years out?
Roll the leaps every 6 mo. on 2 year contracts. Theta is like nothing for that time frame, it's insane
Not getting the tax advantage of holding for a year here though
@@IAMJERM lol this guy pays taxes. Haven’t you heard of writing off losses?
@@IAMJERM That is true. Would need to do a good bit of math to figure out at what point it is worth it, especially if using an LLC for taxes. I don't look forward to calculating that one day lol
@@InfernoPhilM lol you have losses?
@@InfernoPhilM don't lose enough to use this strategy consistently
Showing an example like that really drives the point home, I love vids like these
“With leaps - We’re not part of the high frequency above the shoulders mustard shit group”
Poetry. I love it
Ty for this great video!
I have a question: at 08:30 you say to never sell a leap. I do have to sell a leap sometime on or before the expiration date though, right? if this is correct, when do i do so? would be much appreciated if someone could give me advice on when to sell leaps (aka "close" that position).
Leaps work best when you buy them on pullbacks.
New to your channel, great info, when u say leaps does that mean setting expiration for more then a year?
"You could be a total Donut", love it!!!
thanks for this. There is not much practical info on LEAPS on TH-cam. I like deep in the money SPY LEAPS and then roll them. You are getting about 99% delta and maybe 3:1 leverage on cash. Using only 33% capital, I get pretty much the same as 100% in SPY but a whole lot of cash reserves to sleep at night. Also, the boost from IV gives a little crash protection...convexity is king!
Do you continue to sell your LEAPS and buy a replacement contract with a further expiration date in order to minimize extrinsic value decay?
I appreciate your channel and how honest you are!
Gives a new meaning to "diamond hands"
Your audio is ace bud thanks for making listening easy
Do you recommend selling CCs against your LEAPS?
if the stock pumps really hard or if the IV is extremely high compared to the average.. thats a good time to probably enter some CC's. make sure the premiums are at a higher price and worth it. people probably shoot for around 20 delta area ... when you are picking the strike you want.. 30 if you are greedy and dont mind being wrong and giving up your ITM leaps
Do you exercise your LEAPS when they are ITM at expiration? Or do you just sell the LEAPS close to expiration? I mean exercising would require more capital and selling the shares to buy more LEAPS again would cost in transaction fees? Ty!
@@scottreesetradinginvesting7936
Okay ty! I live in Denmark where most brokers still charges a transaction fee. I guess ill just sell the LEAPS near expiration then
“You could be a donut” “you could be the biggest idiot of all time”
Check and check lol
I’m about to purchase DWAC deep in the money Leaps expiring Jan/2023. Price is 70.00 now, 30,40? Or just get the cheapest 70+ delta?
I need your help on this Adam
A month ago I switched to LEAPS mostly after learning about them 👍🏾 great video
Sooo I buy itm or otm leaps?
Is there a risk of your broker closing your position OTM if the underlying security crashes too hard? Or can that only happen if you buy the leap, call, put or whatever on margin? Kinda new to this options trading thingy.
Lost over 100k of my gme gains because of fomo and chasing weeklies. This video was straight up a revelation. Salm slow and steady. Thank you.
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gotta love that theta decay and IV crush
How should u react to a lack of liquidity in a high priced leap?
LEAPS are the way to go. Time to increase my leverage positions.
i like how you laid out this video and didn't even mention selling covered calls on your LEAPS. your chan gave me the courage and knowledge to pursue LEAPS and Covered Puts, thanks for all the effort
The only contracts I buy is leaps it’s like a bonus check every year
How long do you typically hold your leaps?
At least over a year so you don't pay short-term capital gains tax.
Just buy deep in the money on leaps.
So I have a GE leaps $50 call option 1/19/24 exp. It is now a nonstandard option due to the GEHC spinoff. Says it's worth 100 shares of GE and 33 shares of GEHC no cash in lieu of shares. What are my options with this? Not sure if I can sell it. Should I exercise and take the shares? I'm +$1600 on it, just not sure how to handle this situation. There will also be more spinoffs from GE so I'm wondering if I should just hold on for the ride?
Great video! Enjoyed the process thinking it all through.
Great video, only commenting so this will hit the algorithm, cause this guy deserves it
So if you aren’t supposed to sell LEAPS, when should you take your profit? Or do you hold until expiration?
This video makes me feel much happier about my nio leap.
About to pull the trigger on one too. Thinking of going the distance to 2023 @27. 🤔
Send it
Agreed. Sitting on my NIO leaps rn
Nio leaps make me feel horrible and optimistic at the same time
Got a Twitter leap yesterday. Aiming for that 50% return :)
Would you always suggest an ITM leaps? Or OTM leaps acceptable
One of the best channel for pure investing information.
Thank you!
wait, so if you never sell your leaps.... are these supposed to expire? and be exercised?
@@scottreesetradinginvesting7936 thanks for the insight!!
Personally I'm into selling leaps. Covered calls with years to expiration while a stock is at an all time high usually give you a good amount of time when all you need is 1 red day and you can collect thousands in premium upfront
So on a red day the premium of that option tanks and you buy it back to close?
why not 30-45 DTE?
So when exactly are you taking profit on Leaps or selling them? Or are you just selling otm weeklies.
Adam, I am curious if I can use LEAPS for leveraged etfs and avoid some of their downsides? They usually have very good 5 years charts and they are very liquid and cheaper than popular etfs.
Options on leveraged ETFs often have higher extrinsic value, so you're paying more upfront for the leverage (and for good reason, they can easily explode). If you're already okay with buying that many shares into a leveraged ETF, a leap can be a great tool, but just remember that you're paying a little more in terms of extrinsic value for it, compared to regular old SPY.
Great video indeed, thank you!
I thought about it a little, playing with LEAPS for a while, is it a good idea to buy a LEAP, when seeing a stock that dipped in 25% percent for example, and protect that LEAP with a weekly OTM put in case the stock continues to dip?
An OTM out is a perfectly respectable hedge. I’d do further than weekly though because if the stock tanks later in the week it may be too late for the OTM out to be a useful hedge because too much value has decayed. Just my opinion.
This is exactly what I needed to see after the AAPL drop today. Begs the question though - when do you actually sell the LEAP? Is there a target percent gain or days to expiration?
Treat it like shares. Stay invested until you reach one or both criteria:
1. you hold for 1 year for tax benefits.
2. fundamentals change.
Shares don't expire. You can't hold indefinitely. At some point you need to sell or exercise. I'm asking how people typically determine that point
@@chossmedia As the underlying keeps rising, your LEAPS delta get closer to 1. It then behaves like a stock. You have no real rush to sell or exercise until you’re very close to expiration. If you continue to be bullish on the underlying and want to continue leveraging, you roll out by selling your current LEAPS contracts and buy further dated calls. You do this when your delta remains close to 1 and the underlying drops in value so that your next LEAPS contract benefits from cheaper options pricing.
Finally someone that shares my views.
I use LEAP options but I buy DEEP in the money.
LEAPs and selling puts are my only options trading.
Take it to the next level and explore DEEP in the money LEAPs.
I WILL sell LEAPs under certain conditions. I preemptively set limits order to execute if the option has significantly over performed at the 6 month, 12 month, or 18 month.
Not only that, having those limit orders on the books have allowed me to get filled on really stupid IV jumps.
Hey thanks for your videos. As a new trader getting wrecked on options the last 3 months, since ive found you i have a better approach and have done well on options since.
it really helps
I'm a noob with all the greeks, but I like selling long dated puts around 10 bucks higher than share price if the stock has fallen below 30 RSI, then using that cash to stagger several long dated calls on growth companies, especially mid caps breaking into profitability.
I need to watch this channel more to understand the Greeks and get a clue what's going on mathematically lol. I appreciate the wealth of information you give.
You say not to, but definitely putting all of my tiny account into leaps.
How else can you get to the same leverage as someone with 200k and 20k in leaps which is only 10% of their portfol
200 all in
Above the head mustard shit right there
2k portfolio with 80% in leaps. 🤷♂️
Bruh, 80% of my IRA is in a single contract. AMZN 2400c, Jan '23. I bought it as a 2500c in Jan with a Jan '22 exp and sold CC's above my break even. Made 2k a week just selling calls. When it dipped hard in March, I used the cash to roll it down to 2400 & out to 23. Leaps are the cheat code. Once the Jan '24 options are available, I'll use the cash from CC's to roll it down & out again, if they don't do a split before then. Go deep, like .95 delta and at least a year out on something you really believe will increase in value, never sell a call below break even, and it's hard to go horribly wrong.
thanks for your videos. I'm learning a lot. you give very clear explanation. what is the return to date if you bought at the bottom, , instead of the top? .
The best part about this is how he's looking at MSFT yet hasn't activated Windows
Are there any safeguards to guarantee you will be able to sell the contract assuming you’re deep in the money but closing in on expiration? (I.E only trade high volume stocks?) Will somebody want to buy the contract because they could then purchase the shares at the strike price presumably much lower than the now market price?
This video got me emotional. Great content as always ... literally bought at the top and still making money!
🚨🚨scam alert!!!🚨🚨
I love your videos. You have great content and explain it so well. I have a question, how do you but a LEAP. Is it just an Option with a late expiration date?