While LEAPS Calls offer advantages like higher capital efficiency and controlled risk compared to buying stocks directly, they are not a risk-free strategy. Factors such as time decay and IV all need to be taken into account.
Don’t worry about memorizing everything—The Options Handbook has got you covered on the risks and key considerations for LEAPS Calls! (Don’t miss the mini events at the end! 🎁)
▶ Risks and What to Watch Out For
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Time Decay: Even though LEAPS lose value slowly, if the stock doesn't rise, your option can still shrink.
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Expiration Decisions: If your LEAPS call is "in the money" at expiration, you'll have to decide: exercise it, sell it, or potentially buy the stock.
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Volatility Swings: LEAPS prices can drop if market volatility falls, even if the stock price holds steady.
▶ When to Exit?
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Stock Hits Your Target: If the stock price is near your goal, consider selling the LEAPS call to lock in gains.
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Volatility Spikes: If market volatility jumps and your option's value goes up, even if the stock hasn't moved, selling could make sense.
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Time Value Is Slipping Away: Options lose value faster in the last six months before expiration. It's often smart to exit before the clock runs out.
🎉[Mini Events]🎉
How to Join
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Flip to Chapter 5 of the book and find the section about LEAPS Call. Snap a photo and post it in the comments with your thoughts! 📸
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If you don’t have the book, just share your thoughts on this article.
Example: “Just saw someone in Tiger using LEAPS Calls, the leverage is pretty solid.”
Prizes🎁
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All valid comments or posts will receive 10 Tiger Coins
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High-quality comments or posts will receive a copy of Options Handbook or Mouse Pad
Event Period: from now → Sep 23, 2025
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