This LEAPS Strategy Made Me $119,649 (3 Simple Steps For Beginners)
Вставка
- Опубліковано 10 тра 2024
- Download My Strategy Blueprints For FREE:
1) The Options Income Blueprint: optionswithdavis.com/blueprint/
2) The Credit Spreads Blueprint: optionswithdavis.com/cs-bluep...
When trading Options, you want to have a well-balanced Options portfolio that consists of bullish, bearish, and neutral strategies.
And if you want a bullish strategy that can help you capture unlimited upside potential profits, then you want to use LEAPs.
In this video, I share with you my LIVE trading positions and P&L and show you my exact LEAPs strategy that has made me 6-figures in profit.
Other videos you might be interested in...
1) Generating Income With Credit Spreads: • Credit Spreads
2) Consistent Income With The Iron Condor:
• Iron Condor
3) Recurring Profits With The Wheel Strategy: • The "Income Grid" Whee...
#optiontradingforbeginners #optiontradingstrategies #optionsellingstrategy
Please subscribe & hit the notification bells for more videos like this just for you:
/ optionswithdavis
Join this channel to get access to perks:
/ @optionswithdavis - Навчання та стиль
Thanks for sharing , is there a preference/ advantage to roll in a up/ down day , high/low IV day ?
Get My Strategy Blueprints For FREE:
1) The Options Income Blueprint: optionswithdavis.com/blueprint/
2) The Credit Spreads Blueprint: optionswithdavis.com/cs-blueprint/
When did you open your QQQ leap options? How long did it take to get those gains? Thx for the video.
Outstanding Commentary!!! Priceless!!! Thank You!!!
You're welcome 😊
Thank you for the great video, sir!
You can never say never to opportunity like S&P 500 ETFs, VOO which is up. I’m being instructed by an intelligent investor to buy more anytime it drops, cashing up along the way on every moves, also incorporating new stocks.
SPY, IVV, VOO, VTI hitting the scene so far. These ETF's doing just fine.
There’s much uncertainty now, my question is what tech stocks can be the next wave in terms of growth for the next decade?
Stocks is not only about anticipating moves based off trends but anticipating through participating behind real top performers and attain how they execute perfectly.
coach Frost hilda take good care of my holdings giving me an edge to successful interest.
l've been getting suggestions to use a proper enlightened top tier, please help, I’m trying to figure out your selected holdings at the moment
I've had majority of my holdings in ETFs, tech stocks and I've had 65% increase in my portfolio, especially with Nvidia P/E (price to earnings ratio) adding few others, Feel free to use my steps and construct your approach.
How long have you had the meta option open for ?
This is the best explanation LEAPs todate. Thanks Davis!
You're welcome ☺️
Great video! I have been thinking about LEAPS for awhile now. Thanks!
You're welcome
Probably your best video to date. Good explanation.
☺️
Do you have a trading room with your picks?
Great video. How often do you put these on?
Have you started a trade alert service yet?
I use this as a mid to long-term stock replacement strategy so I'll only enter if the underlying is at a price I don't mind getting in at. Not too fond of trade alert services as I prefer teaching how to fish than giving the fish so no plans for now 😢
Thank you for sharing your knowledge on Leaps. Best explanation on this topic.
☺️
Great segment Davis. Sometimes the simplest strategies give the best rewards. As always humbly appreciative. Best.
☺️
Is it ok buy leaps for Qqq now June 15 when everyone is saying during summer there is a correction? Thanks
Best video on LEAPs that I've watched! Thanks Davis!
You're welcome ☺️
Awesome content!!!! -- Do you suggest this for retirement accounts ?
Possible depending on your holding time frame.
What if the trade is not working the way you intend. do you have an exit strategy? thanks 🙂Love your videos 🙂
You must always have an exit strategy 🙂 Either take the loss or if you're still bullish then consider rolling.
Thank you for you video. If had bought a long LEAP call on SPY or QQQ in December2021, the underlying would have been below entry point for two years, that together with time decay would have given large losses, potentially all premium paid. What do you suggest to avoid such losses in the many periods of decline of underlying ?
Leaps only work when the underlying is constantly increasing. If the underlying dips hard, then sell.
you are one of the very best at this game. your simple, clear and straightforward approach is second to none. I'm really glade i found you.
☺️
Is break even the strike price plus the $/share paid for the option?
When do you close the trade?
Fully explained here: ua-cam.com/video/OFcXqvCXVjQ/v-deo.htmlsi=l5lh454TWHAKHa8Z
Great videos. I just found your channel a week ago.. and I think I have seen the 50% of your list. Well explained, detailed and the best.. very honest. Btw, I have noticed that you don't look at the Open Interest or Volumes of the strike prices. Is there a particular reason for that?
Those metrics may be useful depending on how you trade but not really necessary for how I trade.
This is basically the index roll strategy I read about at the turn of the century (2000) which become more known as lifecycle investing from the same named book. There was a variety of reasons for why I didn't do it then, but I think with yours and other videos I'm better to do it now. Thanks for the video!
You're welcome
Is it too high for Spy and NVda to buy leaps right now. They are both at all time high?
Great video man. I've heard this described before but your explanation of the way delta cushions the blow as the price drops was awesome.
Thanks. I went further to explain it more in-depth here: ua-cam.com/video/OFcXqvCXVjQ/v-deo.htmlsi=P5Duuk17axH3psFH
Thanks Davis, the advice and insights you share in your videos never disappoints. I especially appreciate it when you demonstrate live trades that you made that help explain your point. Keep up the good work!
Thanks and you're welcome!
Do you wait for like a 5% dip before putting on one of these?
most time i will buy leap on bottom of BB.. right now is good time to buy Starbucks leap.. i bought 1 after earnings..
Hi Davis: Excellent Video Thank you very much 👍Using a real live example is very powerful and easy to follow. I have IBKR Desktop . I'm a newbie and have not traded LEAPS. Could you do an example using the IBKR platform?
You're welcome. I don't really trade options on IB since their platform isn't as option-friendly but will consider it.
Thanks for sharing another new strategy. The Leaps strategy seems like required big capital to enter the trade.
Is it possible to sell the call in the same time in order to reduce the capital required ? If yes, which strike price and DTE to choose ? Many thanks in advance for sharing.
Yup, that would be called the Poor Man's Covered Call (PMCC). See these:
1) ua-cam.com/video/k26E1J93PA4/v-deo.htmlsi=ScnQ_cV4SC2tCO5b
2) ua-cam.com/video/mgYBglXqgpA/v-deo.htmlsi=77BOi6fvc8W2jbKD
Sorry if I missed it in yr video but if the stock tanks while you have yr LEAPS on and you believe it will go up and recover, is it better to just hold your existing LEAPS on to roll down and reset your deltas?
Nah man get out and reenter
Nice presentation Davis. Well done. Have you ever considered selling at ATM option near rolling date to remove some capital and still get great upside? Good work, thanks.
Thanks. If you mean selling a call to turn it into a PMCC, then it depends on if I plan to hold it for the long term or not. Usually I have multiple positions and sell calls on some them like this:
1) ua-cam.com/video/-3JxZdqyqlU/v-deo.htmlsi=gEaVFihIn1Ffxn5k
2) ua-cam.com/video/pQbe0IZrs04/v-deo.htmlsi=Dyj1hErRsGSpFYkM
@@optionswithdavis Thanks Davis. Yes, basically your long a call......it moves up nicely, you sell another call on it say ATM......to remove risk and also profit from the spread of the vertical as time value collapse with say 90 or so days left......vs rolling..... Thank you.
I like the way you think 😉 What you've mentioned is called legging-in to a PMCC and it's actually a little advanced, and I mentioned it here: ua-cam.com/video/mgYBglXqgpA/v-deo.htmlsi=dqi2EcRE6SIceVlL
@@optionswithdavis Thanks Davis. I do it at times. Cuts the risk in half and still llots of upside from the new vertical IFF the stock stays at least the same....Thanks
Do you sell near dated weekly calls and puts to recover your cost? While letting your position grow
It depends if I plan to hold on to the position for the long term or not. Usually I'll have multiple positions and sell calls on some of them like this:
1) ua-cam.com/video/-3JxZdqyqlU/v-deo.htmlsi=1iZRVeHpuXVgshlf
2) ua-cam.com/video/pQbe0IZrs04/v-deo.htmlsi=pZm3I9kBaExOD2fH
Have you noticed whether the premium for longer dated options increases in a linear manner or is there a certain expiration point beyond which the price of the premiums begins to plateau? e.g. buying an 8 month DTE is about the same price as buying a 12 month DTE ?
Timing still matters with these. It's best to do it after a bear market or correction. I recommend starting with a spread if you are entering near all time highs. If the market dips, you can close the short LEAP call for a profit. If the market never dips (extremely unlikely) then you've capped your gains. Small price to pay for lower risk imo.
What is prices going down. When to exit ? What are rules on that ?
So it's best to buy leaps on beaten down stocks that you believe will appreciate? With market so toppy, it's tough to find any good leap candidates. You probably bought META when it dived down to around $90 few quarters back when it reported bad earnings.
This strategy needs to wait for the good timing to enter. At the current level, I am not sure if buying leap option for, say, Meta, will be a good timing .... Davis, any guidance here ? thanks
Yup, at this moment the market is near its highs so would be more prudent to wait for a move down before considering to enter. If you have adequate capital, one of the ways to enter would be similar to this: ua-cam.com/video/dt5DXt5G-T4/v-deo.htmlsi=6Jx1TaFkHOGe8esW
Selling leaps for covered calls on qqq. What delta do you use?
Are you bearish on QQQ? Covered calls, especially long-term covered calls indicate you hope the share price doesn't move up very far.It is a bearish strategy that does not do well if the underlying moves up significantly, or quickly (or both). If you sell longer-term calls far enough OTM to avoid having to roll constantly you will receive far less premium overall than doing it monthly, or every 6 weeks or so. If you're forced to roll by misjudging the movement of the underlying, why not just take shorter-term trades? Covered calls can be a pain in the ass even when the underlying just moves up slowly, but relentlessly. In those situations I just give up and wait for it to start moving sideways for a while.
@@aaron6806 thanks
Happy to be the first to leave a comment!
Do you ever sell calls off those shares you control?
It depends if I plan to hold it for the long term or not. If I have multiple positions I will sell calls on some of them and potentially exit them as a PMCC while holding the rest for a longer term. I've done that here:
1) ua-cam.com/video/mgYBglXqgpA/v-deo.htmlsi=UuKA7hMbiaBSA8zS
2) ua-cam.com/video/k26E1J93PA4/v-deo.htmlsi=XCx7viSKEBTeK2xm
What is your exit plan/rules for a market downturn?
Mentioned here: ua-cam.com/video/OFcXqvCXVjQ/v-deo.htmlsi=1gYqjcX19z_eHTTx
excellent video
☺️
sir please share all your free excel etc thanks sir
Do you ever sell a call on these to add additional income and help lower costs? Or is something like that a viable option for someone starting out?
Also, could this same idea be extended to a protective put? You could buy a LEAPS put on a stock that has trended bearish lately and then sell a lower put at a shorter expiration to generate additional income and offset costs/losses
If you mean selling a call to turn it into a Poor Man's Covered Call (PMCC), watch these:
1) ua-cam.com/video/mgYBglXqgpA/v-deo.htmlsi=BGP3qFBhM_gQe9Qb
2) ua-cam.com/video/k26E1J93PA4/v-deo.htmlsi=_DGWFKdwpESHJ0Xg
If your shares are called away, do you lose the extrinsic value?
This is a Long Options strategy so there's no "shares" and no being "called away".
@@optionswithdavis your long call option is the cover for the call you're selling, they're ITM so they can be converted to shares if your short call is exercised. Have you not had the price of the underlying go above the level you've sold a call at yet? Your LEAP will go away, I'm just not sure if they efficiently sell it, or if the broker inefficiently exercises the LEAP to shares and throw away thousands of $ in extrinsic value.
@@optionswithdavis ok it seems you get to deal with it yourself, the broker doesn't do it.
Oh okay I think you mean the Poor Man's Covered Call (PMCC). If what you mean is that the price goes above your short call then there's always the risk of early assignment where you will be short 100 shares if assigned. At that point you can exercise your long call to square off the short shares but I'd avoid the whole assignment in the first place by simply closing out the PMCC as a whole since it should already likely be somewhere near max profit. And yes, if you exercise your long call you will lose the extrinsic value. For the PMCC strategy, watch these:
1) ua-cam.com/video/k26E1J93PA4/v-deo.htmlsi=G1mnyyYusOVuzYVv
2) ua-cam.com/video/mgYBglXqgpA/v-deo.htmlsi=n0CmTktKhgHcaP_q
Oh sorry, I was watching this at 4am and every LEAP video I've seen before was for PMCC :). Watching the video again, thanks.
do we have leap put???
yes
Great Trades! Noticed your commish on Confirm is still .65 per contract. With the amount of $ in the account you can get a reduced rate. Considering the vid was made in Mid-Feb hopefully you have already requested the reduction from your account manager (local office). With Chuckie in charge now, may not be quite as easy. Good Trading and thank you for the videos!
You're welcome and thanks for letting me know! What would be the reduced rate?
@@optionswithdavis Other traders I know have been able to get it to .50 - .55 per contract with smaller accounts than you seem to have.
Delta equals the number of shares you control so 80 delta means controlling 80 shares worth of exposure…can you please confirm as your video stated 80 delta equals 100 shars of exposure? Thanks
Delta refers to price movement. I the underlying stock moves up or down by 1 point, then a .80 delta means it also moves up or down by .80 cents. You want to choose leaps that mimic the underlying equity's price movement, thus choosing 80 delta and up.
Any options contract involves a block of 100 shares, but the Delta number indicates what those 100 shares act like. So yes, 0.8 Delta means your position acts like 80 shares, wherein the price moves 80% of the move in the underlying.
Saying that the delta directly indicates the number of shares you control is technically not correct, but I think it is a great way to visualize the relationship between the options contract and the underlying.
how do u deal with a bear market on the leaps?
@Zdashable Nice one 😂
@josephsaeteurn9158 Watch this: ua-cam.com/video/OFcXqvCXVjQ/v-deo.htmlsi=1gYqjcX19z_eHTTx
Why not using ZEBRAs? Less capital intense and delta of 1 from day 1..no decay... selling calls for additional income possible ..
Zebras are a fairly less common strategy. I just learned about them recently. But great point
@@TheSquirreless true but David as a former prop trader should know it..I guess
I've the same question. I believe ZEBRAs could be a great way to 'replace' stocks for a buy and hold strategy but, if I'm not wrong, ZEBRAs should have less duration, i.e less than 365 .DTE . For sure you can open a ZEBRA for let'say 3 month duratione and then close it and penanew one for next 3 months and so on ...
Also, as you already mentioned, ZEBRAs are working well with a PMCC approach.
DAvis what do you think about ZEBRAs?
Its no less capital intense, you are buying TWO ITM CALLS and sell just one call against them, its more expensive than just buying one call
Zebras are an alternative way to play direction for sure but imo it's more of a short-term trade compared to LEAPS, and I usually plan to trade it for a longer term. And as tvlobo202 mentioned, it's not less capital intensive. But certainly nothing wrong if you prefer trading the zebra. For me LEAPS is simpler since I may choose to roll in the future. More troublesome with Zebras. Great discusion guys and please keep it friendly! We're all here to learn together 😊
How do you know when the right time to buy a LEAP? Do you wait until the market goes down? Then Volatility is up and would be more expensive to buy. Do you buy when the market goes up? Then what happens it it crashes and you lose your intrinsic value? 😢
You can time it similar to this strategy:
1) ua-cam.com/video/dt5DXt5G-T4/v-deo.htmlsi=Rtu_lOErHciljzwC
2) ua-cam.com/video/c9RbaekCPt4/v-deo.htmlsi=9Ixw5ISSL6zwjqZC
Question: being this is so deep in the money, do you ever get called?
I think you're confusing Short vs Long options strategies. You can only ever be "called" away (or assigned) if you have Short calls + shares. This are Long calls. You decide if you want to exercise or not before expiration. If you leave it to expiration and it's ITM, then the broker will automatically exercise for you.
my TSLA, APPL, AMD leaps are all down.. even though i sell CC against the leaps, im still red.. people keep saying if im bullish then you be ok..
the options problem that if you are bullish you wont get all the profit you want - if META will grow 100% - you will get may be 20% of that move - options is only to buy little bit cheaper or exit the position with price you agree + 10% premium
You are referring to Delta as DTE? did you realize that? 15:25
Yup, I meant to say delta there
Personally I'd be too afraid to get into call leaps at this point in time. Perhaps long term puts but even that is sketchy. As the saying goes "the market can stay irrational longer than you can stay solvent." A large market downturn is inevitable it's just a matter of when, not if. Money printing, inflation much higher than what is reported by the media and the white house, geopolitical headwinds, many countries distancing themselves from the US dollar, our enormous national debt, all-time high consumer credit card debt and student loan debt. Wall street is always behind the ball, always looking to pump more and more. At this point I'm just day-trading, keeping the long-term dividend positions that I've had for years/decades and then staying in cash, ready to buy when the market inevitable crumbles by 50-75%.
I hope you were selling short calls against this for premium.
Here you go: ua-cam.com/video/mgYBglXqgpA/v-deo.htmlsi=X0ywPr4FilkEmTvB
LEAPS options is not the ideal strategy - imagine META drops 50% where you LEAPS will be?or META grow 100% and you are locked Delta 20 price- crazy this strategy suitable may be for index like IWM going sideways
Going sidways is not enough for long options positions because of Theta decay
I think you're referring to Selling Put LEAPS. If you actually watch this video, you will realize this is about Buying Call LEAPS where your delta increases as the underlying goes up and decreases as it goes down. Like allergiecheck mentioned, going sideways isn't enough for long options. Sadly there are people who jump to conclusions without completely watching my videos, sigh 😔
@@optionswithdavis ok I got it - you not talking about selling covered calls on LEAPS? just but and wait
Excellent