Thks for the great explanation of call leaps. I personally have bot alot of leaps @ max expiration in early 2022. As you know, last year was a bear market, so all my leaps are basically deep in the shit not money 😃. Anyway, leaps are good, if the market is in a uptrend or bull market. My suggestion is, if you have the cash, its better to buy the stock, buy within your budget, you don't need to buy 100 shares. As for me, l have reverse my strategy, by buying the shares instead, so you don't have that time decay factor. In my opinion, if you are bullish in the stock, it's better to buy short term 50 to 120 days, if you are wrong, cutt loss at 50% of your premium paid. But a safer way is off course, do a bull call spread, a cheaper way and everything is cap.
Great explanation. Very appreciated. Curious, would you do leaps on just SPY or QQQ? Wouldn’t that amplify the gain/loss as well? Or the draw down is much bigger that you could get margin called?
just found your channel 3 days ago... can't stop watching. you teach how i learn so i'm pumped to watch all your video's. hard part is remembering to sleep and eat while i video binge.
Thanks for another great video Davis. Only traded a LEAPS once, but I'm considering getting back into them. What are your thoughts on trading these on cash-settled indices like XSP?
Glad I discovered your channel, I'm learning a lot. Would it be an idea to combine the LEAP call you buy with a call you sell at a high strike price? You would receive some premium, you're selling more extrinsic value so you would win a bit if the share price stays the same (=the call you bought looses less value than the one you sold). Near expiration it's quite possible you're winning on both calls when the share price rises a bit as the call you bought is in the money while the one you sold isn't. The only downside I see is that your profit is maxed at the stike price of the call you sold, but that means you would still come out ahead quite well.
Yes, that's the Poor Man's Covered Call. I've created two videos on it here: ruclips.net/video/k26E1J93PA4/видео.html ruclips.net/video/mgYBglXqgpA/видео.html
For short term trades I use short puts and spreads (iron condor, credit spreads, etc). I've created a video on short puts here - ruclips.net/video/fPcb3XzBrj0/видео.html Here's another short term trade using the jade lizard: ruclips.net/video/HKHWrRFoNk4/видео.html
Thanks Davis. I would like to ask you whether it is a good idea to do one month covered calls off the LEAPS which many have called them as poor man's covered calls. I did the maths for the situation that the underlying rallies and my covered call gets assigned, I will lose all the extrinsic value prematurely. Do you think therefore it is wise to sell PMCC?
Hi Davis, thanks for the great video. What do you think using LEAPS options to buy ETFs, like ARKK and QQQ? What should one pay attention to if doing so? Thanks!
Thanks and you're welcome 😊 If you think both will go up in the long-term, then you can certainly use LEAPS on them. I've no views on ARKK but I have a number of long-term LEAPS on QQQ. Just take note of what I mentioned in my LEAPS videos: ruclips.net/p/PLn4dMDRu5KCDX27t3BvCQR-qFa2ynYSog
@@optionswithdavis Thanks Davis! Regarding the Call Leaps, I understood that we should always go for the option with the longest available DTE(> 1 year) and delta > 0.9,; moreover, the cost of the leaps option is about 50% of the stock price. What if a Leaps option trade price of a stock that matches the above-mentioned conditions is much higher than 50%, like around 80% (please refer to the stock AI with DTE 493 or 857), what does it mean when the Leaps option is high (>60%)? Does it mean that the relevant stock is very promising? In this case, should I go for AI Leaps option with DTE 857 (> 2 years) according to the rules? Thanks!
Subscribed! The best LEAP overview I’ve seen. Could you employ your “income ladder” strategy to DCA in with additional LEAPs if the market tanks and lower the overall cost basis? Watching all your videos and was interested how you survived your time in the propriety trading desk. Particularly interested in your “enhanced wheel strategy” using ratio spreads and will adjust my trading plan accordingly. Thanks for all your tips to the community and keep the videos coming!
Yes it's possible but slightly more complex than using CSP in my "Income Grid" Wheel Strategy video because if the market is still below your LEAPS close to expiration, you may have to consider rolling if you still want to keep the position on. With CSP, you can let it get assigned and be Long Stock. And thanks for the support, appreciate it 😊
Yes it's possible but slightly more complex than using CSP in my "Income Grid" Wheel Strategy video because if the market is still below your LEAPS close to expiration, you may have to consider rolling if you still want to keep the position on. With CSP, you can let it get assigned and be Long Stock.
@@optionswithdavis Thank you for your rapid response! To clarify, am I correct in saying that you would prefer to manage your original LEAP option if the market tanked at about 60-90 DTE by rolling your strike out and down, buying back intrinsic value to minimize the purchase of extrinsic value for the reasons outlined in your helpful video, rather than DCA down with new LEAPs at lower strikes. The reason is because you would be purchasing new intrinsic value anyway in either method. Am I on the right lines?
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Thks for the great explanation of call leaps. I personally have bot alot of leaps @ max expiration in early 2022. As you know, last year was a bear market, so all my leaps are basically deep in the shit not money 😃. Anyway, leaps are good, if the market is in a uptrend or bull market. My suggestion is, if you have the cash, its better to buy the stock, buy within your budget, you don't need to buy 100 shares. As for me, l have reverse my strategy, by buying the shares instead, so you don't have that time decay factor. In my opinion, if you are bullish in the stock, it's better to buy short term 50 to 120 days, if you are wrong, cutt loss at 50% of your premium paid. But a safer way is off course, do a bull call spread, a cheaper way and everything is cap.
You're welcome. And thanks for sharing your experience 👍
Thank you so much for giving back, you finally explained it way I or any new b would understand! Thanks 1mil and may bless you with fortune:).
Hi Davis, great video explaining the concepts of LEAPS. How do consider the factor of volatility and rho in your trades? does it matter or not?
Great job, appreciate your expertise and thorough explanation.
Thanks 😊
Great explanation. Very appreciated. Curious, would you do leaps on just SPY or QQQ? Wouldn’t that amplify the gain/loss as well? Or the draw down is much bigger that you could get margin called?
just found your channel 3 days ago... can't stop watching. you teach how i learn so i'm pumped to watch all your video's. hard part is remembering to sleep and eat while i video binge.
Awesome 👍
Thanks for another great video Davis. Only traded a LEAPS once, but I'm considering getting back into them. What are your thoughts on trading these on cash-settled indices like XSP?
Great explanation! Very thorough.
Thank you 😊
Question, how do I pay less taxes if take debit on roll? Thank you.
Glad I discovered your channel, I'm learning a lot.
Would it be an idea to combine the LEAP call you buy with a call you sell at a high strike price? You would receive some premium, you're selling more extrinsic value so you would win a bit if the share price stays the same (=the call you bought looses less value than the one you sold). Near expiration it's quite possible you're winning on both calls when the share price rises a bit as the call you bought is in the money while the one you sold isn't. The only downside I see is that your profit is maxed at the stike price of the call you sold, but that means you would still come out ahead quite well.
Yes, that's the Poor Man's Covered Call. I've created two videos on it here:
ruclips.net/video/k26E1J93PA4/видео.html
ruclips.net/video/mgYBglXqgpA/видео.html
@@optionswithdavis OK thanks will check those out as well
👍
Would you use LEAPs for shorter term swing trading (couple of days or weeks)? If not, what option type is best used for that?
For short term trades I use short puts and spreads (iron condor, credit spreads, etc). I've created a video on short puts here - ruclips.net/video/fPcb3XzBrj0/видео.html
Here's another short term trade using the jade lizard: ruclips.net/video/HKHWrRFoNk4/видео.html
@@optionswithdavis Thanks Davis. So basically you make sure you always end up with a net credit, no matter what
That's right.
Thanks Davis. I would like to ask you whether it is a good idea to do one month covered calls off the LEAPS which many have called them as poor man's covered calls. I did the maths for the situation that the underlying rallies and my covered call gets assigned, I will lose all the extrinsic value prematurely. Do you think therefore it is wise to sell PMCC?
Hi Davis, thanks for the great video. What do you think using LEAPS options to buy ETFs, like ARKK and QQQ? What should one pay attention to if doing so? Thanks!
Thanks and you're welcome 😊 If you think both will go up in the long-term, then you can certainly use LEAPS on them. I've no views on ARKK but I have a number of long-term LEAPS on QQQ. Just take note of what I mentioned in my LEAPS videos: ruclips.net/p/PLn4dMDRu5KCDX27t3BvCQR-qFa2ynYSog
@@optionswithdavis Thanks Davis! Regarding the Call Leaps, I understood that we should always go for the option with the longest available DTE(> 1 year) and delta > 0.9,; moreover, the cost of the leaps option is about 50% of the stock price. What if a Leaps option trade price of a stock that matches the above-mentioned conditions is much higher than 50%, like around 80% (please refer to the stock AI with DTE 493 or 857), what does it mean when the Leaps option is high (>60%)? Does it mean that the relevant stock is very promising? In this case, should I go for AI Leaps option with DTE 857 (> 2 years) according to the rules? Thanks!
How do you choose the strike price? Very interesting video thanks!
You're welcome! Created a video on LEAPS strike selection here: ruclips.net/video/iXMaFY6L_WQ/видео.html
Excellent video 👍🏻
Thanks ☺️
Subscribed! The best LEAP overview I’ve seen. Could you employ your “income ladder” strategy to DCA in with additional LEAPs if the market tanks and lower the overall cost basis? Watching all your videos and was interested how you survived your time in the propriety trading desk. Particularly interested in your “enhanced wheel strategy” using ratio spreads and will adjust my trading plan accordingly. Thanks for all your tips to the community and keep the videos coming!
Yes it's possible but slightly more complex than using CSP in my "Income Grid" Wheel Strategy video because if the market is still below your LEAPS close to expiration, you may have to consider rolling if you still want to keep the position on. With CSP, you can let it get assigned and be Long Stock.
And thanks for the support, appreciate it 😊
Great lesson! why we want to roll 60-90 TDE not closer to TDE?
To clarify my previous question, I mean your”income grid” partitioning of deployed capital that you use in the wheel strategy.
Yes it's possible but slightly more complex than using CSP in my "Income Grid" Wheel Strategy video because if the market is still below your LEAPS close to expiration, you may have to consider rolling if you still want to keep the position on. With CSP, you can let it get assigned and be Long Stock.
@@optionswithdavis Thank you for your rapid response! To clarify, am I correct in saying that you would prefer to manage your original LEAP option if the market tanked at about 60-90 DTE by rolling your strike out and down, buying back intrinsic value to minimize the purchase of extrinsic value for the reasons outlined in your helpful video, rather than DCA down with new LEAPs at lower strikes. The reason is because you would be purchasing new intrinsic value anyway in either method. Am I on the right lines?
Good video, what about the wheel strategy
Thanks. Created a video on the Wheel Strategy here: ruclips.net/video/5GS91P9ovqQ/видео.html
Is there such thing or good idea to do Put leaps?
If you don't mind paying for long-term downside protection, then you can do put leaps.