Hey guys, this is going to be a complete

guide on LEAP options because back in

2021, I scaled an account from $100,000

to $700,000. And in this video, I want

to go through a step-by-step process,

what leap options are, how to use them,

what are some proper setups, and I'm

also going to go through some live

examples of LEAP opportunities that I

see right now. This is going to be

awesome. So, LEAP options are insanely

powerful trading instrument. so powerful

that again I was able to really scale my

portfolio earlier in the days when I was

you know I graduated from college I had

a job I was making okay money and I had

$100,000 which I was working forever on

because I had been trading for a few

years at that point I was adding money I

was trading as much as I could but you

know it was pretty hard to get to

$100,000 it took me years but then once

I hit $100,000 oh boy here's like a

compound chart that you can see on the

screen it was like this okay and a lot

of that was from leap options. Leap

options I have to credit for really

changing my life. This is probably the

most profitable option strategy that I

have personally used in terms of of

growth. Okay, so that 700K you can see

here is earlier in the days I was doing

not that good. I was kind of struggling

on my way to $100,000. You can see here

how you know this was probably what 2020

this was before 2021. I had like a 50k

portfolio and as you can see just not a

whole lot of consistency and obviously

now I have scaled to seven figures but

on my way I really credit this strategy.

This is why I talk about this all the

time on on my YouTube channel here and

this is actually why I have created a

strategy that I call deeps. Okay,

doesn't really exist anywhere else. So,

I'm probably going to trademark it, but

deep specifically is my method of how I

use LEAP options, and we'll talk about

that soon. But, you know, as they say,

with great power comes great

responsibility. Or as I like to say,

with great profits comes great risk. So,

I want to highlight that this strategy

is amazing, but it is a double-edged

sword. So, we will have to discuss uh a

lot about risk management. Risk

management is something I focus on in my

one-on-one coaching because it's not

really how much money can you make, it's

making money and keeping it as well.

It's a kind of very very important

combination there, right? You can see

Floyd Mayweather, you know, they're

saying that he's going broke right now.

So, you know, obviously you can make a

lot of money, you have to keep it as

well. So, leaps can be very risky if you

don't know what you're doing. And that's

why people say options, you know, they

say options are risky and it's because

if you do it incorrectly, it's very

risky. You know, people when they, you

know, learn about options, they think,

"Hey, it's day trading or it's

gambling." It's really not. It just

depends on your stock selection, which

we'll talk about, and we'll jump into my

portfolio. I'll show you some of the

positions I currently have. I think Meta

is going to be a killer. So, you know, I

want to respect your time. If you just

want my plays, I think Meta is going to

be one. Amazon and Netflix. And then I'm

going to have another one probably as

well. We'll go into deeper detail, but

yeah, Netflix sold off like crazy. meta

as well. Under 600 I think is a steal.

But here's kind of like the casino

gambling odds versus day trading. Um,

you know, casino most people lose. Day

trading, everyone loses. I I think day

trading is a scam. Um, but yeah, it's

all about odds, right? So, that's what

really matters. And when I trade

options, my goal is to put the odds in

my favor as much as possible. So yeah,

we'll we'll discuss, but if you know

what you're doing, which is what I'm

going to show you, you can essentially

have a lot more limited risk. And

depending on how you think about it,

right, if you want to own the stock

anyways, and you use a LEAP option to

replace your shares, I'm going to show

you how to optimally replace shares, I

would argue that the risk is very low if

you want to own or you're going to own

the stock anyways and you replace it

with the strategy that you know, this

option strategy essentially. So

basically, yeah, you can see on screen

what I what I think about it. Okay, so

enough about me hyping up this strategy.

My goal is not to sell you this

strategy. It's to give you the

information so you can decide for

yourself. So I'm going to give you some

theory and then also some practical

knowledge. Uh, by the way, here's my

Goldman Sachs badge. I know that

nowadays with AI, anyone can create

images, but this was an image of my

Goldman Sachs badge back in oh, this is

a long time ago. This is probably eight

or nine years at this point. Okay. I was

a lot younger. had a better better

hairline. Better hairline. But anyways,

um I'm going to share a lot of the stuff

that I learned. So, I sat next to

adviserss who used the exact strategy. A

lot of the clients at Goldman Sachs,

they're really after wealth

preservation. And I know, you know, a

lot of people that are watching my

channel, you know, they want to build

wealth. A lot of millionaires are not

really coming to me. Although I have

seven figure portfolios, majority of

people are hardworking professionals,

engineers, lawyers, business people,

employees, corporate job people. and you

know they got 30k, 50k, maybe they have

six figures. So they want to do what

I've done, right? So it's not about

preserving wealth, it's about scaling,

it's about scaling wealth. So this is

what I think um the leap strategy is so

good for. So my mentor turned a large

profit on Apple position back in 2018

and he used LEAPS and that's how I got

introduced to this strategy. You know,

when I was working on Wall Street, to be

honest, although I had a job on Wall

Street, I didn't have that much

experience. I was a lot younger. I was

in my 20s and you know it was cool. I

had a prestigious job but I didn't

really know what I was doing until I put

it to work and now I have a wealth of

information. That's why I make YouTube

videos because I want to help other

people get into the same shoes as me. I

mean you could see you know every video

I'm you know I'm traveling so my

background could change and I'm in

different hotels. I'm eating different

food going to different places and it's

cool because that's freedom. That's what

I think a lot of people are after. So my

portfolio 4 million from 100,000 to

700,000 I would say built it established

my portfolio and then after that I did

um other strategies and I discuss them

on on this channel but credit spreads

was also pretty good which is a strategy

for another video but I used some credit

spreads. I traded a lot of Tesla but

yeah let's continue on with my

presentation. So here's the flip side.

Um a LEAP option is leveraged so keep in

mind when I show you a LEAP option and

I'll jump let me jump into like Meta

right now. I'm going to open up Meta.

I'm going to show you what I look for

and we'll kind of combine theory and the

actual trades side by side. Oh, look at

that. Meta. When I made this

presentation, Meta was like right here

at 566. Now Meta is already coming up

[snorts] pretty hot. Oh man, my

community's I told my community

yesterday. Can you imagine that? I told

my community and now we're my members

making back all their the coaching fee

in a day. Crazy. Because a leap is

leveraged. So you you know when the

stock's up 3%, a LEAP can be up 9 10%,

because it's it's a leveraged vehicle.

So we'll we'll go over the mechanics in

a in a second, but it's leveraged. Okay,

keep that in mind. So don't risk more

than you can lose, of course. Um and I

think I already mentioned I'm not a

financial adviser. This is just my

experience. My uncle Henry 10 years of

bicep over tricep experience. I hope you

have fun with this because life's about

having fun as well and making money.

Hope I can help you with both. Um so

yeah, leverage cuts both ways. it can be

very dangerous if the option does go

down. So, a LEAP option is very simply

uh just a call option. Okay, so we're

buying a call option, but it's a

long-term call option. Um we'll talk

about strikes in a moment, but LEAP

options give you control of a stock.

Okay, so here's a stock owner. You know,

if you want to be a stock owner of Meta,

you want to buy 100 shares, that's

$58,000. That's a lot of money there.

Your total account might not be $58,000.

And if you have a six-figure account,

that would be way too much of your

portfolio. way too much. You can't even

diversify properly if you have a 100

shares of Meta unless you have a massive

portfolio which I do and still I prefer

diversifying as much as I can. So stock

owner can be expensive 100 shares of $50

stock 5K that's reasonable but Meta no

58K way too much. But a leap call option

it can literally be a fraction of the

cost like a very very small fraction of

a 100 shares. So I'm going to show you

so stick around. this mistake, a mistake

that you can make can literally wipe out

most people because it looks cheap, but

you got to know how to do this stuff.

So, I promise you, if you invest your

time and understand this on a deep

level, you can run with this. You can

literally run with this. And then from

there, if you want me to coach you,

great. But if you have success with this

yourself, hey, Uncle Henry gave you some

free free wisdom. Just take it and run,

you know, just maybe um I don't know,

just send me an email, say, "Thanks,

man." That's all. Or just subscribe.

Subscribing is really all I all I would

like. But um yeah, so let's start with

the big idea. The big idea is a leap

isn't speculation. A leap is really

stock replacement. That I'm going to say

that one more time. Write this down. A

leap isn't speculation. It is stock

replacement. You already have companies

that you believe in. Okay? If you don't,

I have a whole list in my Discord

community of all the stocks that I

follow. Find a stock that you like and a

leap lets you get exposure to that stock

without having to put up all of that

upfront capital. Like we're going to

look at Meta. We don't want to put up

$58,000 doesn't make sense. Okay. So,

the same upside if the stock runs, we

get a lot more upside for less upfront

capital. That's the biggest benefit of

what a leap option is. It is tying up

less capital so you have more

efficiency. And of course, as everything

in life, nothing is truly free in life.

There's always a catch. That catch is

that upside needs time to show up. And

the idea here is in one line, the right

company, long enough runway, and if your

thesis plays out, you end up doing what

I did, which was I had a huge thesis on

Tesla, and I turned 100K into 700K. Not

all of it was Tesla, but Tesla was a

significant portion of that. So, this

isn't chasing the next move. It's really

getting behind the right play and then

using LEAP as a tool to just make a

bunch of money on a stock going up.

Okay, that's the whole idea. So, it's

owning the outcome that you already

expect. So, what is a LEAP option? A

LEAP option is just a long-term option

contract. And I am going to trademark

the term deep because the way I want to

do it is by basically buying a deep in

the money leap. Okay? So, call it DEAP

or deep, right? We're going to have some

fun with it. But so by definition, an

option contract with more than a year

until expiration. But I still consider a

uh shorter expiration such as 9 months a

leap as well because for me it's not

about definitions. I really want to just

profit off of a longer term horizon.

Okay? So 9 months gives me several

earnings quarters. Earnings happens

every three months. So you know every

time earnings happens, stocks can move a

lot and that's why a leap that is, you

know, enough time is so beneficial. So,

here's a time decay. Here's one year.

Here's uh 6 months. And I kind of drew

it here. Kind of funny. 1 month and then

one day. Obviously, you can see in the

last one day everything's gone boom.

Just lose it. You lose all the value on

the option. But because, you know, we're

not going to be holding a LEAP option at

expiration. We don't have this problem.

We're not here. We're going to be

selling this option right around here

before it experiences that massive time

decay. Okay? So, when I buy a one-year

leap option, typically, and here's my

exit plan, I want the stock to go up and

then I exit at the halfway mark. Simple

as that. Anyone else that complicates to

more is trying to sell you something.

They're trying to sell you on a course

or on their mentorship or they're like

literally they are themselves trying to

over complicate it for no reason

whatsoever. The simplest way to play a

leap, if you watch the rest of the

video, great. If you don't, that's fine,

too. I hope I'm going to drop so many

more knowledge bombs, but the number one

knowledge bomb that I'm going to drop

right now on this video is that you

don't have to over complicate it all. If

you buy a one-year leap, your only goal

is that the stock goes up and at the

sixmonth mark, you have to manage it. It

is time to manage at the six-month mark.

Either take profit, roll, or close out

if it's not working your favor.

>> [laughter]

>> Okay, that's literally one of the like

biggest golden secrets is before time

decay kicks in, do something. Don't just

sit there and wait for the option to

start to decay. Here's what I'll show

you. Okay, so here's Meta. Okay, I think

Meta is going to be like $700 per share

in like early 2027. I think just

literally one nice momentum run. So, I'm

going to show you. I'm going to go for

an expiration date. I'm going to go to

buy call. I'm going to go for an

expiration date that's going to be out a

good amount. Okay, let's go for

September. This is actually one year out

option. This is a one-year leap option

right now. This is going to be crazy.

Okay, it's going to be crazy. Why?

Because look at the $600 call option.

We'll talk about an out- of the money

leap. Just a simple idea right now. And

then I'll go a little bit more

complicated later on. Look, $600 call

option. It cost $102. So the break even

is 700. There's no money to be made.

Correct. Yes. At expiration. Are we

holding until expiration? Absolutely

not. Absolutely not. So, in theory, if

you hold until expiration, you break

even. You spend 100 and it's worth 100.

You can see here that it says uh max

profit is unlimited. Your max loss is

10,000. So, let me explain a little bit

more. So, this max loss is what you pay

for the option. Okay? And right now, MET

is at 580. The strike price is at 600.

So, if it's 600 or below at expiration,

you can lose $10,000. That's your risk.

However, that rarely happens to me just

because I'm really not holding the

option until expiration because again, I

showed you kind of the chart up here

that you start to lose most of the time

decay right here. Okay, let me show you

what time decay is, kind of what it

means. So, if I expand this option right

here, you can see theta. Now, theta is

time decay. I'm going to put an arrow

right here that points to theta. Okay,

so theta is 05. What does this 15 mean?

Well, actually, since each option is 100

shares, if you multiply 0.15 by 100, it

just means that this option is losing

$15 per day. That's why there's a

negative amount here. So, you're losing

$15 per day. Now, why is that the case?

Well, time is money and everything costs

money in this life. So, if you look at

theta, you are essentially renting out a

100 shares. That's kind of what this is.

You have a call option and it's losing

value every single day from time, okay?

because you're kind of renting out a 100

shares, but you don't have to pay 58

grand. You're paying 10 grand. Amazing,

right? And you can do this with cheaper

stocks as well. But here, 10 grand, way,

way better and more capital efficient

than 58 grand by a long shot. So that's

data. This is a really important metric

for you to understand because as the

option gets closer and closer to, you

know, expiring, this data is only going

to jump up. I can show you a good

example of that. So let me actually show

you how theta can move like super

against you. So let's go to September

18. Okay, if I look at the 600 call

option, uh you can see the theta here is

49. This is three times more decay per

day than than 15. It's more than three

times, right? So you're losing $50 per

day here. And keep in mind this premium

is also a lot lower. So as a percentage,

you're losing a ton of money 17 days

out. And if I go for something that's

three days out, it's going to be even

more than that. So, let me scroll down

here. I don't know why it started me up

so high. Let's scroll down here to like

600. Okay, there's so many strikes when

you look at short-term expiry here.

Theta's, you know, over $100 and this

option is worth 284. So, it's losing a

third of its value per day. Makes sense

because there's only 3 days left. So,

this option is going to lose all of its

value very soon. By the way, this is why

I prefer option selling, but that's for

my other videos. Let's go back here

because I just want you to understand

what we looked at. So, instead of buying

100 shares, we're renting out a 100

shares via LEAP options. That's what a

LEAP option is. It gives you control.

So, here you can see control means the

same upside if the stock climbs. In

fact, it is the same upside in many

ways, but it's a little different. Okay?

So, I can explain to you step by step

how it's different. Let's go back here

to the 917

expiration of 2027 because although the

movement can be similar, the behavior is

different. Okay, so if Meta goes up by

10 bucks, then this LEAP option would

rise about $5.96,

right? So that's how it behaves. Okay,

it behaves kind of similar in this

regard. When the stock goes up, the LEAP

option goes up. Now, this movement that

it goes up by $5 is actually amazing

because it's basically5 or $6 on a 100.

So, as a percentage return, it's big.

It's big because you are making more

money on the leap option than you are,

you know, on the stock as a percentage

since you have put up so much less

capital upfront. Okay, that is one of

the biggest benefits. Okay, so control

means same upside if the stock climbs,

same direction, right? So it's very very

similar to just owning stock. So you

essentially have the same leverage as

owning 100 shares, but the only

difference is 30 or even 20% of the

price. Okay, here we're putting up 100

instead of basically you know 580. So

that's like probably less than 20%. So

this in terms of capital efficiency is

even less than 20%. Amazing, right? So

obviously that's kind of what we're

looking for, right? We're looking for

leverage. We're looking for upside. Now

let's talk a little bit about how leaps

move with the stock. Um so here we have

stock price. If the stock falls 10% I

told you there is risk. A leap will

underperform and a leap is like a

double-edged sword. So you will lose

money on the downside uh a good amount.

Right? So if the stock is down 10% the

leap can be down 25%. So make sure your

stock selection is is accurate. Make

sure you know what you're doing on a

technical analysis etc. Right? That's

that's the benefit of my community. is

because learning strategies is cool, but

also knowing when to apply the strategy

and on what stock is very very

important. Okay? It's like going out to

a tennis game with a bat. You're not

going to hit the ball. Even if you have

the best swinging technique ever, you're

using the wrong, you know, instrument

essentially, right? So, when the stock

is up 10%, flip side, right? The leap

can be up a lot more. You can see here

how LEAP functions and uh more time is

just more potential. That's what I love

about LEAPS is you don't have to be

correct in the short term. You just have

to be correct over many many months for

your thesis to play out. So that's what

I really like about it. LEAP options

have deep time value. If they're

especially uh in the money, then they

have low theta as well. So we'll we'll

go over that kind of more uh accurate

example of what I call deeps. Okay, I

really need to coin that term. But uh so

wait, before you go into your brokerage

and really start trying to buy LEAPS,

you still really need to understand that

most people are getting LEAPS wrong.

It's because they're buying options that

are out of the money. So, you know,

that's really not the right way. So,

I've helped a lot of students go, you

know, really, really grow their

portfolios. Of course, getting the same

type of kind of growth that I got into

2021, uh is possible with the right

stocks and especially with a lot of uh

momentum stocks now that are going up.

Stocks are going up, you know, triple

digits. So, a leap option could could

really really fast track someone that's

looking to retire or gain gain financial

freedom. So, um there's a careful art to

this. Again, risk management is so

important because a lot of people can

make a ton of money. It's about

protecting as well. So, to master it,

you need to understand these key three

aspects. Delta, okay, delta, which is

what makes my strategy unique and

different from anyone else on YouTube

who even covers leaps. Not sure if many

people do, but if they do, they're

definitely not doing it my way because

my way is something that I learned

personally when I was trading and

working for institutional asset managers

and entry. Okay, we're going to look at

some technical analysis. Theta is the

easier one, but still very very

important. When you combine these three,

these are the three pillars that um you

know ideally get you to growth as well

as understanding the risk and managing

the LEAP strategy properly. So, most

people think they understand this, but

if you're still not getting the results

that you want, you probably just don't

understand the basics. That's it. You

just need to know the basics. Like many

things in life, you just have to be good

at the basics. But what's easy to do is

also not easy to do because it's so

easy, you don't do it. You forget it or

you don't master it and you just think

you need more and more. It's not the

case. Again, keeping it simple. Keep it

simple and stupid is my motto. Okay?

Okay, I work with a lot of busy

professionals and they don't have time

to make it advanced and the advanced

stuff doesn't even work anyways. Okay,

so the first is the easiest to

understand. Let's get into the pillars.

Uh this the first and easiest one out of

the three. I would say it's equally

easiest data, but here's delta. Okay,

we're going to kind of look at uh Apple

here a little bit closer. Okay, so here

is the strike prices of Apple. the more

in the money you are, okay? So, if

Apple's at, you know, 300 or whatever,

310, 320, whatever it is at the time of

this video that you're watching, right?

The more the option is in the money, the

more value it already has. It has value

right now, it has value today. If it's

in the money, okay, so what do I mean by

that? Well, look at Meta. Meta is at

580. So, this $600 have money right now.

Is it in the money? It's not. It's out

of the money. It's not over 600. It has

no value today intrinsically if you were

to exercise right now. Now I don't think

anyone should be exercising options.

That's different story. But um I

typically just trade. I just trade. I

get in, I get out and I make my profits.

I'm not exercising options. But look,

this option at 600 strike price is out

of the money. Has no intrinsic value.

All the value right here is just time,

volatility, and a whole lot of may,

right? Maybe the stock will go up, etc.

Right? And the more the options in the

money, okay, so we go below 580, it's

going to be more valuable. It's going to

be more valuable because it already has

value. It already has value right now.

Okay? And vice versa, an option that's

out of the money is going to be cheaper

because the chances of the stock getting

to that price is lower and lower because

it's out of the money. It's further

away. So the further away you go, and I

apologize that this is a little

confusing because I took a screenshot

from Yahoo Finance. this is going down

but on Yahoo Finance going down is more

out of the money. You see these strike

prices are getting higher whereas on

this you know brokerage that I'm using

um not important which brokerage you use

but this one is going up. So hopefully

I'm not confusing anyone. Okay, so let's

talk about kind of like my secret sauce.

What I call deeps, deep in the money

leaps, which is the way I do it as a

stock replacement is I'm looking for a

delta of 0.75

as my sweet spot. I'm looking for in the

money leap option. This is what kind of

makes my LEAP strategy so unique and so

different is I'm not looking to buy out

of the money options. I don't really

think that makes sense. It can work out

for sure if the stock goes up a lot. But

what if the stock goes up a little bit

and I want to take profit in a week or

two, right? Because we don't need to

hold a LEAP option for that long. I have

many LEAP options where for example, let

me do some easy math for you. Okay,

let's say let's say I have this LEAP

option right here at 600, right? Check

this out. If Meta goes from 580 to 600,

that's a $20 gain, right? That's not

that much for the stock to do. A $20

gain would result in this option going

up by $20 times the delta of6. Okay,

because that's how delta works. It tells

you how much the option will rise in

value. So 20 times the delta of6 is $14.

So this option would rise by 14. You can

kind of do the math right now. A $20

rise on Meta, I'll put up on the screen.

Okay, a $20 rise in Meta is just a

couple percent this number on screen.

But it going up 20 bucks on the stock

pushes the option up by $14. And $14 as

a percent I'm going to put up right here

I already know is around 14% almost 14%

because this option is worth $101. So

it's like very very close to 14%. It's

like 13.8%.

What a huge difference. And if that can

happen on Meta and just literally like

that can happen in a week. Meta has

volatility, okay? Or any other stock.

I'm just showing you an example. I

actually already have this position, not

600. I have something else. I have the

540 um which is the strategy that I'm

showing you which is deeps. But anyways,

this move in the stock just a few

percentage makes the LEAP option rise a

disproportionately

large percentage. I hope that you're

seeing right now what's possible with

LEAPS. Okay, let's go back here. So 75

delta. Why do I do that? What does that

look like? Well, first of all, delta is

a Greek letter that option traders use

to measure the probability the option

will finish in the money. That's one of

the definitions. The other is the one

that I just explained, which is when the

stock goes up by a dollar. Delta

explains how much the option moves in

relation to the stock. 0.5 delta means

that the option will go up by 50 cents.

Okay? So 70 delta means there's a 70%

chance of assignment, which doesn't

really matter to us because we're not

holding until expiration. assignment

really doesn't um matter to us too much,

but it is important to know for your

other option trading strategies that you

may use. So 70% chance or how the option

behaves, right? So higher delta will

require higher premium and technically

that's more risk. However, um the way I

view it is let's go here. Let's go down.

Let's go down to 540 cuz I have the 540.

It's not for September, but I have for a

different expiration date that's really

far out. I would do 540 myself. That's

what I just told my community to do on

Monday. And because the stock is up even

1%, we're already up like four or five

percent on the day. But essentially, I'm

going for a higher delta that is

about.7. And this delta right here is,

you know, in my opinion, in my

experience, so much better. Although

it's more upfront capital, which

technically is more risk cuz you're

putting up more capital up front. The

sensitivity that you get is is greater.

So when the stock goes up by a dollar,

you get a whole 68 cents on the dollar

for the move, right? And because this

option is in the money by a good amount,

it actually already has in the money

value. So this is already in the money

by 40 bucks. So you know, even if the

stock does nothing, the time decay is

going to be a bit nicer given that this

option is already in the money. It

already has value to it. So yeah, lower

delta is less premium. It might look

safer, but it's really not because you

can go for very low deltas. I mean, I'll

give you an extreme case just so you see

that it's not safer. Let's go for like a

thousand. I mean, is this safer? It's a

lot less money up front, but the chances

are low. Chances are low. Chances are

not in your favor. 17% chance that this

option will expire in the money. Not

good. So, I would not like this because

if Meta goes up by 1%. I mean, this

option is not really moving that much.

It's so out of the money that investors

are like, it's not even close. It's not

even close. Meta would have to go up a

crazy amount for you to really, you

know, significant gain. So that's why

lower delta not really not really good.

For leaps I like to go for around 75

delta and that's usually my optimal

riskto-reward balance. You can go more

than 75 delta but then it's also like

you're just paying more and more and the

benefit that you're getting of replacing

shares has already happened that 70

delta effectively. So 75% of your

options staying in the money is the 75

delta. All right. I want you to

understand what in the money means

versus out of the money. And just

because you're in the money doesn't mean

that you're automatically going to be

profitable. So here is a chart right

here. And the most important takeaway,

the most important lesson is in the

money and out of the money. You can

still lose money overall and not be

profitable if you are below your cost

basis. Okay? So being in the money does

not mean that you're profitable. Because

if your cost basis is higher, just

because you're in the money doesn't mean

really anything at all. So the most

important anchor point for trading leap

options is understanding the cost basis.

To actually make money, you need to know

the cost basis is simply what you paid

for the option. Your break even is your

strike price plus the premium that you

paid. So if you buy a $100 strike leap

call option for $15, your break even is

going to be $115. See this is the strike

price $100 premium 15 break even $115.

Always make sure to do that. Never miss

whatever you paid for your premium plus

your strike price because adding them up

makes your break even point. So delta is

also not profit. Your cost basis is the

price that you pay for the option. The

break even is a strike price plus the

premium that you paid. And as I just

showed you, $100 plus 15 would be your

break even point. And in the money does

not always mean profitable. If you buy

an out- of-the- money option, even if it

goes into the money, still does not mean

that you are going to be profitable. The

most important and pretty much only

thing that matters to you whenever

you're buying a LEAP option is whatever

you pay. So, let's go back here. I'm

going to show you a position right now.

I'm going to use Amazon stock. I like

Amazon a lot. I think it's a great

business and this stock I am very, very

bullish on in the future. So, I actually

have $79,000

um invested in Amazon. I want to show

you right now what can happen to a leap

option. So let's go to buy call and then

I'm going to go out for basically one

year. Let's go to September 17. And now

we can see here. So buy call option. Buy

call option September 17th. That's good.

So now let's go for out of the money. So

for example, let's go for uh 260 right

here. Right? So for example, if Amazon

goes to 261, right? That would be in the

money. But if that happens next year in

August, believe me, there's not that

much time left on the option and it's

really not going to be worth that much

because it's in the money by $1. There's

no time left. So, as you can imagine,

all this premium that you pay, $41, a

lot of this is going to just decay. So,

this option is going to be worth a few

bucks next August, right? If it's in the

money by a dollar, it'll be worth at

least a dollar plus some time, but it's

probably not even going to be 10 bucks.

It's it's probably going to be just a

few dollars. So you can see here how it

can be in the money and you're still

going to lose money, right? So you can

see here how for example at expiration

if it's at 264 it's not worth anything.

It's actually you have lost money

overall. You're going to be in the red.

Now if there's some time left this will

be you know better but you need a lot of

time. Okay that's the whole point of a

leap option. There's a lot of time. This

chart is just showing you what happens

basically at expiration. before

expiration time is going to add, you

know, value to the option. So again, a

delta of 0 75 means there's a 75% chance

of finishing in the money, not a 75%

chance of profit. Okay? And I'll show

you more examples. Let's move on into

the second pillar, which is entry, which

is arguably the most important. And I'm

going to open up Yahoo Finance right

now. And for entry, what we really want

to understand is technical analysis. So,

some of the stocks that I follow are

going to be on the right here that I,

you know, regularly discuss in my

Discord community. There we go. While

this loads up, you know, Bloom Energy,

Oracle, SoFi, Hood, Apple, American

Airlines, Nebus, Amazon, Meta, Nvidia,

let's look at Nvidia. I think Nvidia is

a great long-term stock. So, let's take

a look at Nvidia right now, and let's

talk about um the second pillar, which

is entry. So entry can be the difference

honestly between blowing up your account

and having the type of results that I

was able to achieve back in 2021. So

obviously no one can really predict the

market. So I'm not going to try to say,

"Hey, I know exactly what's going to

happen because I don't I'm not a

financial adviser. I can't predict the

future or anything like that." But I can

definitely put odds in my favor and

basically give myself an edge. And

that's what's um going to be important

whenever you have your entry into a LEAP

option. So predict when it is the

perfect time to enter a stock right

before it goes up is not possible. But

we can use indicators and different

techniques which I'm going to show you

right now. So let's go into chart. I'm

going to show you basically a good time

that I would get into a stock. So again

on the chart I have here the moving

average and the bowlinger band. You can

see here how Nvidia has some very

interesting behavior. The stock actually

ran up like crazy from April or end of

March here all the way huge huge rally

to over $230 per share by May. Then it

has basically taken a nose dive. So this

was overreaction too much upward

momentum and steam and had a pullback.

You can see what's interesting here is

there is a lag. Okay, this 50-day moving

average is lagging because it's taking

into account the last 50 days. So you

can see as the stock goes up, okay, the

moving average goes up but not as fast.

It is not as reactive because it's an

average over 50 days. So it's smoothed

out. Okay, but you can see how it is

very valuable to investors because the

moving average tells you simply an

average. And I think that majority of

stocks and just based on pure math alone

that stocks are going to be moving

around their moving average. So whenever

it is pulled up too much it you know

it's likely to come down and when it's

too low it's likely to come up because

you know law of nature mean reversion.

Okay mean reversion things come back to

whatever is average. Okay so you can see

right now Nvidia is slightly above. So I

am not too excited about buying leap

options on Nvidia. I was telling my

community to buy 200 when it was sub

200. I was begging them. I was literally

on my knees guys please buy leap

options. Here's what I'm doing. I was

purchasing leap options. I just wanted

my community to see profit, right? And

that was a very good call. Not that

Nvidia is up tremendously, but from sub

200 to 217, that's a 10% move in the

stock. And we know right now that leap

options are leveraged. So you can see

how, you know, my community has done

really well since really, you know,

August, all of August, cuz this was end

of end of July and I was telling them

when it was around here. So yeah,

probably actually mid July. I let them

know. So I'm not too excited about

Nvidia. So, we're going to move on into

another stock because, you know, do I

want to buy leap option above the moving

average and towards the higher end of

the bowlinger band? Not really, unless

I'm super bullish on the stock. Okay, so

let's go to SoFi. Let's look at what's

going on with SoFi. Okay, the stock

looks like it's down. It's actually

trading in a super tight range. It's

been amazing for the wheel strategy. I

won't discuss that too much, but that's

another strategy that I use all the

time. U but look at this. Check this

out. You can see here how SoFi has moved

below the moving average and below the

Ballinger band. This is beautiful. This

is like I'm getting hungry. I'm getting

hungry for some steak with some nice

nice salt on top. I mean, this looks

very good. Very good. This is exactly

the setup that I want. So, this is the

entry setup that to me looks really good

under moving average and under bowlinger

band. Okay. So, it's really important to

pick the right stock and it's important

to see the right setup. So leap options

is basically a full year of your money

riding on one company. So whenever I'm

looking at a stock, it can't just look

like this. This is great, but if it's a

bad stock that you don't want to own,

it's no good. I do want to own SoFi. So

this is a very beautiful setup that I'm

excited about. But if you get the wrong

company, then really no charts going to

save you. So before touching Delta,

before touching price, or really any of

it, you got to ask yourself, is it a

good business? And this is what I spend

a lot of my time researching. So

whenever I come into my community and I

do my live calls, I'm already well

researched into the stock that I want to

own, why I want to own it, and I look at

all these factors. So here's some of my

stock selection factors. So I love

competitive advantage and moat. This is

something that I learned in business

school. It's essentially looking if a

business is hard to compete with, that's

all right. If a business is easy to

compete with, there's low barrier to

entry, then the business can be

disrupted. I look for pricing power. So,

a company that can raise prices and

investors are not really going to do

anything. I mean, look at um OMIC,

right? If Ompic's price went up, people

that are on OMIC, you know, they're

probably not not going to get off Ompic.

If they're getting the benefits, then,

you know, doctor prescribed them or

whatever or they just want to lose

weight, then they're probably going to

be on Ompic whether it's goes up by 20,

30, 50% in price, probably they're going

to make more money if they raise prices.

Okay? So, earnings growth, you want to

make sure the company is growing. Yeah,

that's kind of speaks for itself. uh

capital intensity. The lower the

capital, the better. However, this

one's, you know, obviously if you're a

more advanced investor like I am and I'm

doing my research. While a great

business could still have high capital,

obviously, right? Some businesses have

very high capital, but generally

speaking, lower lower capital to

basically print money from a company

level is is better, right? So, return on

capital is high, cash is significant,

right? Apple has Apple and Microsoft

have billions and billions of dollars of

money in their um bunkers that they can

deploy to buy back shares to invest in

growth and so much more. Cash so earns

significantly more than it consumes.

Management is extremely important. I can

do an entire video hour on management

alone. But you can just take a look and

take some notes from this scorecard.

Take a screenshot or yeah simply simply

you know learn about my Discord

community. I talk about this all the

time whenever I'm investing in

businesses. So, a good business is

really three things. Growing revenue,

profitability, and moat, which we pretty

much already discussed. Mo, think about

it like a castle. This is a funny image

right here, but think about it like a

castle, okay? Or think about it. What's

that island in San Francisco where

there's like a prison? Anyways, if the

prisoners try to leave, there's like

crocodiles in the water or whatever,

right? Think about that as a moat. So,

nobody's going to be like coming into

the water and like taking over your

castle unless they have advanced

technology. This is a long time ago.

There's crocodiles in the water. You got

a wide moat, right? Nobody's going to be

taking your castle, okay? Unless they

come in with a massive huge army, then

sure, they can. But it's going to take

significant effort. That is the key.

That's what a mode is. Takes significant

effort, capital, time, connections,

relationships to disrupt the business

and uh become a competitor. Okay? So if

you miss one of these things then you're

basically guessing and your leap option

is also not going to be successful

because at the end of the day a leap

option benefits when the stock goes up

and that's it right so growth is the

business actually bigger than last year

so that's what I see actually with so

far I see a huge mismatch between the

business and the stock that's part of

the reason I talk about it on YouTube I

think it is a tremendous opportunity now

you got to know what's cheap and what

that actually means so cheap doesn't

mean that it's a low stock price you

probably know that unless it's your

first week or month investing A low

stock price doesn't mean anything. It

means a good price compared to three

things. Where it's been, what's

happening right now, and what the chart

is telling you. So, here's basically,

you know, history here. So, 52- week

high is 5.85. I want you to try to

figure this one out yourself. 52- week

low is 150 and the current price is 475.

Is this a good candidate for a LEAP

option? I purposely asked you this

question. What's your thoughts? You

might be thinking, not really because

it's towards the higher end. and you

would be correct, but it does depend how

fast the business is growing. This would

simply be an analysis of price, but we

would need more information. So,

basically down about a fifth from the

high, the kind of dip a strong stock

takes on its way up, that's amazing,

right? If it's a strong stock, it takes

a dip, great. But if it's a stock that's

been going sideways and um maybe it's

already up a bit and it was at 400, now

it's up at 475, not as attractive,

right? Because it has already made the

runup. So you want to see opportunities

that are less favored and less liked in

the market. So I want to make this video

a little bit more efficient and quick.

You can read the example on screen that

I have. Think for yourself and answer

it. This is kind of the second outcome

here and you can write to me in the

comments below what you think about it

if this would be a good leap option to

do. And then here's the third one, the

technicals. So three tools, same job.

Figure out figure out if the price is

stretched or normal. You want to look at

moving averages. And we discussed moving

average, but I also want to discuss the

RSI. So RSI, I want to scroll down here

and give you one more technical

indicator to look for. So RSI is

basically telling you how much a stock

is either overbought or oversold based

on the relative strength of the volume.

You can see here that SoFi is currently

at 42. So despite it being below the

moving average and below the Ballinger

band, it's actually not very cheap based

off of this indicator. Okay, you would

want this indicator to be around 30 or

below. At 42.95,

it's actually, you know, it's not saying

that it's time to buy just yet. So,

looking at one indicator alone is not

going to be a conclusive, you know,

deciding factor. You really want to

combine multiple things. And my thesis

on SoFi stands despite the RSI here. But

typically, RSI can be very helpful in a

scorecard. And I have a full scorecard

in my community where I basically say,

"Hey, here are the multiple factors that

I'm looking at and here's how the

overall scorecard is uh scoring for lack

of better term, right? Bowling your

bands we already discussed. You can read

what I have here on the screen, but

yeah, pillar two is super important.

Let's go over into pillar number three,

which is the last pillar, and that is

theta." So, it's really crucial for you

to understand so you avoid blowing up

your account. A lot of people they will

hold options until the last day and

especially an out-of-the-oney option

it's going to be losing so much value in

the last kind of time that it has. So

what is theta? We discussed it earlier

in this course but every option that you

own has a meter running on it. The meter

has a name and that is theta. Theta is a

Greek. So what is this Greek? Well the

Greek that measures how much value your

option loses each day purely just from

time nothing else. This means that no

other factors are important. We're just

talking about theta. If the stock moves,

if volatility increases, theta can

change and theta is dependent on the

other factors. Okay, but theta by itself

all things being equal usually is just

time passing. Okay, so basically the

rent that you pay for holding the trade

open one more day. Every option price is

built from two parts. Intrinsic value,

which I referred to earlier, and

exttrinsic value. How far in the money

your strike already sits is intrinsic

value. And exttrinsic value is

everything that you paid on top of that.

Theta only ever eats the exttrinsic

part. It's not going to eat what you're

already intrinsically made money on. So

here's a chart intrinsic versus

exttrinsic value on options. And you can

see here how they do move together as

time passes and the option is decaying.

You can see here how exttrinsic value

will go down with time. Okay? And it's

actually pretty linear. It's not

perfect. You can see here it's not

perfect and that's because it depends on

the stock as well. When the stock goes

down, the intrinsic value goes down. You

can see here how the exttrinsic value

will go with it and that's just it

follows the stock but not in a perfect

way. Okay, they don't rise and fall

together perfectly. You can see here how

exttrinsic value all that time it's kind

of more I would say more linear. Okay,

whereas intrinsic value it's going to be

moving with the stock more. So whenever

the red kind of line here moves up,

okay, intrinsic value is going to jump

up and be much more sensitive because it

matters a lot more. Intrinsic value

matters heavily heavily for an option.

You can see here every time it has a

little bit of a bounce, the stock goes

up. Now, why would this red line not

bounce as hard here as it bounced here?

Okay, this is interesting, right?

Because there's a bounce here, the red

went up, but the red went up more here

with this bounce even though intrinsic

value is the same here. Why would the

stock price here jump up a lot more yet

the intrinsic value not go up as much?

And one of my explanations for that is

you can see here a drop in exttrinsic

value. This could be a drop in

volatility and the other factors that I

discussed. Volatility, interest rates do

impact LEAP options. Not in a severely

heavy way, so I won't get too deep, but

I just wanted to say and show you that

this is a very interesting chart right

here because the stock price jumped up a

lot, but intrinsic value did not jump up

as much. That's because of the fall in

exttrinsic value. You can see here how

intrinsic value is more. It's you know

the blue is thicker here but the green

has severely you know fallen down which

is exttrinsic in time value which can

come as value from volatility and time

and because this has fallen so much even

though the stock is going up well your

total value here hasn't really changed.

So, at day, you know, 150 left versus

day 210 left, this 60-day period, you

haven't made any money yet, the stock

has gone up. And that is possible with

LEAP options. A LEAP option will not

gain value. If enough time passes and

volatility is falling and even the stock

goes up, you can still be at the same

exact point. As you can see here, this

is very, very interesting to kind of

analyze. All right, let me show you like

an example of a option on Tesla. This

was a little bit ago as I was making

this slide two weeks ago, but doesn't

really matter. I just want you to

understand Theta and as I'm going

through this video, just keep that in

mind. I just want you to understand

this. So Tesla $341

per share or whatever two weeks ago, um

you can see this option chain right

here. I want you to really look here.

This is um a little bit different

because I'm typically using Robin Hood,

but obviously I work with people that

have different brokerage accounts.

Fidelity and Charles Schwab and I have a

lot of international folks. Um I have

people from UK, from Italy, from

Germany. And for those folks, inter

international uh interactive brokers,

excuse me, is what we use. But anyways,

let's uh take a look here. This is

Charles Schwab. I have another account

um that I use in my private coaching, my

one-on-one, my second portfolio, which I

don't really share publicly. But here is

a Tesla Leap option. And the Tesla Leap

option, you can see here the symbol, the

dates of expiration is June of 2027, 300

strike price, buy to open. Now, I want

to kind of go over some details here.

So, the share price is about 340. The

strike price is 300, which is an in the

money option, right? Expiration date

June 2027. And the example fill is $86

or 8,600 total. So a fill just means how

much you're going to be paying for the

LEAP option, aka how little someone is

willing to sell it to you for. If you're

selling an option, it's how much someone

was willing to buy it for. So let's just

go over the theta example, which is the

picture that I'm trying to paint for you

here. So let's say the example theta

here is.08.

And if you zoom in here, you can see the

theta is 0.0. 0815.

Okay, we can see the other Greeks here.

The delta 70, which is basically my

sweet spot. I like 70 delta. You see

gamma here, theta, vega, but the most

important is really the delta and the

theta. Okay, the delta we discussed and

the theta here is 0.08.

Okay, so what does that really mean?

Well, that means that every single day

this option is losing $8, which is

actually very, very low given how much

you're paying for this option. In total,

$8,600 because there's so much time on

the option every single day loses $8,

which to be honest, I would argue as

very, very little. It's losing very

little value. So, to rent out, you know,

a 100 shares of Tesla, which here would

be like 30 grand, you're just paying $8.

Amazing. That's the value and advantage

of a leap option. So your own chain will

show something different. Just pay

attention to the theta and understand as

a percentage return how much it is per

day versus the amount of capital that

you're putting up. So again for me in

this example 8 days in cost which is I

would say 8 days very very little $8 per

day $56 per week and across a month

right that's like $240 across a 30-day

stretch. And the meter does run on

weekends, so time goes whether we want

time to go or not, right? I'm going to

be losing more hair whether I want to or

not. Um, time time just goes, right?

Time is money. So, Friday close to

Monday open charges you 3 days of theta.

That's fine since theta is not that

much. And of course, more news comes

into the market and the stock can go up.

So, I wouldn't be too concerned with

that. Now, here's the flip side. Theta

is the admission price for owning time.

So every option buyer pays it on every

contract every single day. And the

question that decides to trade is will a

stock move enough to outrun it. So when

I scroll up here, will the stock move

enough to outrun it? That's the most

important point. You can see here how

the most value this option had was

actually in the beginning. So this

option ended up being not successful.

Okay? as time went on, even though the

stock was higher than it was at a

certain point, it never really made any

money in in this uh in this diagram. So,

can you outrun Theta is a really huge

question. Now, how theta eats your LEAP

options every day? We kind of went over

that. So, quick here and then we'll

we'll keep it moving. We'll keep it

pushing. The daily charge changes as

expiration gets closer. It, you know,

rapidly accelerates. So, we went over

this earlier in the video, but here is

how fast it accelerates and especially

in the last portion of time. I would not

really suggest that you hold an option.

All right, guys. Let's continue on with

this course. It's obviously taking me a

long time. Hope that you're appreciating

this video. If you are, leave a like and

subscribe. All right, so how do I pick

the expiration date? Expiration date is

incredibly important. Picking the

expiration date is, yeah, it's

imperative to your success because too

short, you're going to be dealing with a

whole lot of theta. My default is 9

months, which you know, honestly, it's

not like textbook definition of a leap

option, but I'm okay with something

that's around 9 months. That gives me

three quarters of basically work to have

in the LEAP option itself. And then

after 3 months, when there's 6 months

left, I told you that's when I evaluate

an option when it has 6 months left to

expiration, giving me 3 months. And

honestly, a lot can happen in 3 months.

So that's pretty much my minimum giving

it 3 months and at the 6 month mark

evaluating. But typically one year out

is also a gold standard for a leap

option. So say that you're eyeing an

Nvidia leap, right? Nvidia 225 might be

a little bit different as you're

watching this video. Maybe several

weeks, doesn't matter. 225. Okay, we're

going to take that price and we're going

to look at expiration dates out in June,

September, and December of 2027.

Basically 300 days up to almost 500

days. So around this length of

expiration is the sweet spot. Okay.

Again, time enough time is super

important. It's kind of like a plane

taking off from a runway. If the runway

is too short, the plane cannot take off.

It's basically not even a leap. It's

just a short-term call option. And

buying short-term call options is

typically a very big losing strategy. So

9 months is my preference, especially

when I have like a shorter term view on

a stock or just simply one year. Now 2

years ties up capital for too long. So,

I do see some investors saying, "Hey,

Henry, I'm super bullish on, you know,

say Nvidia, I think it's going to be,

you know, 10 trillion, 15 trillion, 20

trillion. Can I just buy a LEAP option

that's out for 2028?" The answer is yes,

but I would still kind of say that's

suboptimal just because that's capital

being tied up for way too long. So, now

you're kind of on the other end of the

extreme. So, in my opinion, it's just

really not worth it. Now, remember,

Theta bites hardest near the end. So, a

longer expiration buys you time for your

bet to be right. Here's kind of like a

picture, a funny one. But Apple will go

up tomorrow. No, no, no, no. Let's not

let's not play that game. If you want to

watch other channels, I don't even know

any that are that short-term minded cuz

that's clearly just not the way to go.

Okay? Or Apple will go up in the next

year. Yes. Yes. That's that's the

mindset that I like. So, you want the DK

window to still be very far away. Okay.

And I'm just going to remind you about

this image, and we're going to keep it

pushing cuz you've seen this image a

couple times. But here is kind of like

the the no-go zone. Okay. This is the

no-go zone. This is the hot crazy

matrix. [laughter]

You know what I mean? There's this one

video that went viral, but that's off

topic. So, here's the beginner mistakes.

Hold the leap too long until it's about

to expire. That is biggest number one

red flag mistake that you can do. Uh and

then the next one is then doesn't

understand why the value of their LEAP

is absolutely tanking. So yeah, these

two are connected to each other. Now

let's move on and talk about stock

selection. So the stock is the whole

trade. A LEAP option won't work if the

stock doesn't go up. So obvious, right?

But yeah, people forget that they buy

LEAP options on crazy stocks and those

stocks just don't do anything. Well, you

can just go for something that's

traditional and standard like the Mag 7.

Mag 7. Apple, Microsoft, Amazon, Google,

Tesla, Meta, Nvidia. These are the

stocks that honestly, yeah, I'd be very

happy to have a LEAP option on. So, this

is like the perfect recipe. Just like,

you know, some chicken tikka masala. I

love my Indian food. Yeah, this this is

the recipe. This is some, you know,

garam masala making it nice and spicy

but safe at the same time. So, here in

this leap strategy, there's only like

two main ingredients. It's not like you

have to cook up a whole dish. That's so

difficult. Honestly, like cooking is

harder than this leap strategy that I'm

teaching you. So, stock selection, which

is number one, don't pick the right

stock, you're gone, right? And then two

is entry. So, I showed you entry on

technical analysis. Um, ideally, you

want to buy a stock and buy a leap

option when it is towards the bottom of

the bowlinger band towards the 52- week

low. That's more of your ideal situation

to be in. So, the company that you

choose is the most important. I'm going

to open up my portfolio now and just go

through some LEAP options. But I wanted

to remind you if you want up-to-date

personalized recommendations for LEAPS.

You literally want me to hand select and

show you what I'm doing. Well, you can

learn more about my Discord community.

Just last month, I added some shares to

a stock that I think is going to really

blow up and it's super undervalued.

Yeah, this is pretty much what I write

in my community. I said, I bought 25

shares of this stock just dollar cost

averaging. I like the stock at these

levels. Very, very simple updates that I

do all the time. Anything that I do, I

post right away on a discord and they

can see this in Henry trades within the

Discord community. So that's what this

looks like. So that's where I share all

my leap trades and other trades live in

my community. So now let's jump into my

screen. Before I go over the five

detrimental leap mistakes, I just want

to show you some LEAP options that I am

looking at right now. One of them being

Google. So let me go into Google here.

By the way, the difference between

Google and Google is just voting rights.

So it's not that important. You don't

have to be too concerned with the two

different stocks. It's the same thing.

Just one has voting and one doesn't.

Now, I am up $98,000 on Google and I'm

actually running um a couple different

strategies which are different from this

video and yeah, just transparently

showing you everything shows that I'm

down, but I've had many options expire.

I am option selling on Google, but I

think option buying will do just fine on

Google. I am very bullish on Google in

general. I think search is going to

continue to explode. Obviously, they

have a strong growing AI business which

they're investing into. In fact, they

they invested so much into AI, they had

negative cash flow in the recent

quarter, but that's going to change.

Obviously, that's like a one-time thing.

But yeah, you can see Google here was

pushing towards $400 per share and now

the stock is at 335. So, I think that it

can push $400 again in 2027. So, pretty

easy strategy is just buying a LEAP call

option. I'm going to go out into

September. Actually, I can even go out

to December, December 17, 2027. And then

the way that I like to do is just again

buying deeps. Okay. Deep in the money

leaps. Yeah, deeps. I like that. I like

that term. So, yeah, let's go for like

320 right here. You can see that it's

almost 70 delta, which is pretty much my

sweet spot. 66 delta here or 67 delta.

The implied volatility is 35. So, it's

not high. And that's actually okay

because the lower the implied volatility

actually the cheaper the price is to buy

the option. So a low implied volatility

is actually a good thing when you're

buying a leap option. Yeah. Essentially

volatility can increase and if

volatility increases the value of the

option goes up. So even if the stock

doesn't do anything actually the value

of your LEAP could literally rise from

nothing besides implied volatility going

up. So implied volatility is actually a

good thing when it rises and you have a

long leap option. [snorts] Okay. So the

320 strike here is going for $70. So the

break even here is, you know, $3.90

basically, which is expensive. If we

think that Google is going to be $400

per share, there's not a whole lot of

money to be made here. However, the

caveat is I think Google can be $400 per

share well before December 2027. So

yeah, if it's $400 in summer of 2027,

then it's going to have $80 in the money

value, right? So, it's going to be 400.

And if you know the strike price is 320,

you're 80 bucks in the money. So, it's

going to be worth at least 80. And then

because it's going to be summer or June,

whatever, December is still like 5

months away. So, it's still going to

have a lot of theta. Pretty hard to say

like ahead of time how much theta or

time value the option will still have.

But I would say that if there's 5 months

left, well, we can do a comparison right

now. So, first step is to calculate what

our exit price will be here in summer

when Google reaches 400. I'm gonna

estimate basically I'll show you. So

first of all, step one is in the money

value. That's 80 bucks, right? So $80

will be in the money. Okay, so we know

we're buying it for 70 and it'll be at

least 80. But how much more than 80?

Well, why don't we just look at an

option that already has currently like

five months left to expiry. So 5 months

would be roughly 5* 30, 150 days. So

let's just go for January. So now we can

see an option that would be you know

let's just go for an in the money

option. So we can see let's say 320

would be in the money. There's 5 months

left. This option is in the money by 15

but the option is worth 36. So if we do

the math there right 335 minus 320 it's

15 but this is trading for 36. So the

difference there is like 20 bucks. So

this option has $20 worth of time. Okay.

So roughly 5 months is worth $20 worth

of premium on this strike price, right?

I'm just doing some back of the envelope

math in a weird different way because I

believe looking at things, calculating

them, doing estimates is always to

learn, okay? Like in my community

sometimes I'll do like weird

explanations and I do weird explanations

that are different because I think

that's what helps people understand

things. Okay? Like for me, I like to

look at extremes because then I can

understand like what can break, what can

go extremely right, and what can go

extremely wrong. So I just want to do

this back of the envelope math so you

can understand a leap options profit in

a in a different way. So yeah 320 right

this is worth 36 but it's in the money

by 15. So it's really about 20 $21 of

time for a fivemonth option. Okay so

going back to our first example if we

have $80. Okay let's go back here. So if

this option is worth 70 that we pay for

it is going to be $400. That means it's

going to be 80 in the money value plus

probably at least $20 worth of time

value, the option will be worth probably

at least $100, potentially more. Okay,

so that's pretty nice because from $70

to let's say a little bit over $100,

which the option will be worth if Google

goes to $400, well that's basically

around 50%. So I find that pretty

attractive because from now until June

of of summer, that's 9 months. So 9

months 50%. That's pretty much around

the exact ballpark of what I consider

excellent. I consider that excellent

scaling at 50% in 9 months is like peak

level better than Warren Buffett.

Literally better than any investor

that's even honestly gambling and

getting lucky. This is like literally

peak of what I would consider amazing.

Right? So this is exactly what I'm

talking about. 9 months 50% would be

amazing goal for me. Um and I have done

that many many times in uh different

ways not just leap options I've done

different strategies but overall when I

get that type of return I am very very

happy like I had a leaps challenge back

in January and then from January to July

it was a one-year leap challenge and I

ended it in July because I had 50k and

then when it was 100k in July I just had

a meeting and said guys I know we're

ending sooner here but are we upset that

we're ending sooner where we uh you know

effectively took a 50k K portfolio to

100. So, we're pretty much done here.

And then I said, "Hey, you guys ready

for one-on-one?" A lot of people took me

up on the offer because they were

extremely happy with my outcome. Okay.

So, they were extremely happy. They were

like, "Yeah, sure. We can end it earlier

and I'm ready to move forward and do

some one-on-one coaching." So, yeah, I

mean, transparently, it was it was

amazing. It was amazing for them. It was

amazing for me. It was a win-win. So, um

probably will do that in January again.

But, um yeah, so that's the kind of the

first trade is Google I would look at. I

do like INEN a lot. IN would be like the

second it would be kind of cheaper leap

option as well because IN general is a

cheaper stock. So when a stock is

cheaper itself and then you buy a LEAP

option on it then yeah it's it's very

cheap overall. I am down on Iran. You

know what's interesting when you're down

on a stock I can basically like double

down by buying shares or I can buy a

LEAP option and when it recovers I can

recover my money sooner. So yeah, I'm

looking to do this. So if you look at

buy call option, okay, I'm going to go

out. I'm going to go a little bit

shorter term. I think I has a lot of

volatility. I'm going to go for like May

21st, 2027. And honestly, like I'd like

to go like higher risk here. You can see

here, actually, that's not higher risk.

The delta 71. So that's actually exactly

what I'm looking for. So this option

right here, the premium is $14. So the

break even is 48. I would really need I

rent to move a lot, but again, I would

probably cut this a lot sooner. So

around January time, if my rent is at 50

bucks, then yeah, I'm going to be again

similar situation. I'm going to be in

the money value by $15 and I still have

a lot of time value left. Okay, as you

can see, that's basically what I do with

my strategy is I'm not holding until

expiration. You know, we talked about

that like two or three times. Now, what

I'm doing is I'm waiting for a increase

in value on the stock. My LEAP option

increases disproportionately a lot in

value and I have a lot of time left. I

take profit and I get out of the leap

option because I'm up a lot. I'm up my

goal profit. So, if my goal profit is,

you know, I usually like 30 to 50%, but

sometimes it could be 50 to 80%. Depends

on the situation. I'm not going to go

that deep down the rabbit hole here, but

essentially 30 to 80%, I find an exit

point. Obviously, that's a big

difference. So, optimizing that really

improves and scales way quicker. But

pick an exit point and once once I have

that, I don't need to hold it longer

because at that point I have more and I

stand more I should say to risk and lose

than I do to gain. Let's discuss the

five most detrimental leap mistakes that

will cost you thousands of dollars.

Leaps hand you 100 shares of upside for

a fraction of the cash. Same lever that

builds your account can actually wipe it

out just as fast. So here are the five

mistakes. Number one, this is a big

mistake, which is buying the cheap

strike price. Two calls, same

expiration, one is way cheaper than the

other, and you get very attracted by the

cheaper one because who doesn't want a

deal, but you get what you pay for. So,

Apple is the example here, roughly $39

per share in this example. And if we

look at a LEAP option expiring June 17,

2027, we can see two different strike

prices. Okay, the first strike price is

270, which is an in the money option.

And the next one is 360, which is an

outofthe-oney option. The first option

here that's in the money is $6,290.

Okay, kind of expensive. So, a lot of

beginners that are running the LEAP

strategy will look at the 360 strike and

say, "Well, hey, this LEAP option is

$1680.

Okay, I like that. 1680, that's way less

than, you know, $6,290.

I like this one. Seems like a better

deal." Well, the beginner who thinks

that way and says, "Wow, look how cheap

this one is." is making a big mistake

because the pro goes like this. This one

might be a bit more expensive, but now I

had a good cushion in case that I'm

wrong and it has a high delta ensuring

that my option will move similar to the

stock. Two things are going on here that

the pro is thinking about. First one is

cushion because the option is already in

the money. It already has value straight

away. So even if the stock goes sideways

and it doesn't do too much, you can cut

out the position, get out of it, and not

lose that much money. But this position

right here that's out of the money is

going to decay extremely fast because

it's very sensitive. If the stock is not

moving in the right direction, then

investors, traders, and just the model

that is valuing this option is going to

plummet. And it's going to plummet

because the chances of this becoming in

the money falls and dwindles very

quickly. Okay? Whereas this, it already

has in the money value. So even if the

stock is going sideways, it's not losing

as much money as quickly as an

outofthe-oney option. Okay? So that's

what I mean by cushion. And then high

delta is basically, let's say that

you're bullish on Apple, right? I like

Apple a lot. So if Apple goes from, you

know, $39 per share to $329 per share,

that's a $20 increase. Well, this option

right here, because it has a higher

delta of.75.

Well, 75 time $20, $15. So this is going

to increase by $15.

Great. Awesome. Right. this option. Yes,

it is actually a lot cheaper and it will

increase by a lot less and this will be

very attractive but overall at a much

higher risk. So take the.34 multiplied

by $20 and that's going to be like six

bucks. Okay, so this one moves by 15

bucks. This one moves by six bucks. So

you know you get a much better move

here. Although I will admit the

percentage here will be higher but it's

not worth it. It's just not worth it in

my experience. So the beginner grabs the

cheap one almost every time. Feels like

a smart move. It feels like budget

friendly. But investing and making money

is not about always being budget

friendly, right? It's about scaling

efficiently and paying attention to your

risk and reward ratio. So it's really

like the opposite. A budget friendly

could could completely be, you know,

backwards. It could be cheap, but guess

what? You get what you pay for. So

there's a reason why that option is

cheap. It's because it has high risk.

Think about options basically like a

car. So if you need to get from point A

to point B, got three choices, right? So

here's the three choices you have.

Option A is you have the most affordable

but actually most risky. The road can be

very bumpy with this car right here. I

mean, what if it breaks on you? What if

you have a really long trip that's very

important to you to get to the end

destination? I mean, you can rent the

cheapest car, right? Uh it's the most

affordable, but yeah, there's more risk.

And I'm actually undermining the risk

cuz the option could could obviously

backfire much more than than uh this

beat up car. But you get you get the

picture that I'm trying to paint here,

right? Here's option B, which is the

mid-range price. This is the most

reliable, actually. So, this is actually

the most reliable. This is the best

choice, which is option B. And then

there's option C, which is super

expensive. Will definitely get you

there. Maybe it's a lot of fun for you,

and it'll get you to the end

destination, but will also break the

bank. It'll also break the bank. And not

to mention what this is a Lamborghini,

but you know something like a McLaren. I

thought this was McLaren for a second. I

forgot which image I put in for my

slide. But um yeah, Lambo, McLaren, you

know, I'm not a car guy. Same thing to

me. But um it will break more often on

you, especially if you're going a long

distance. You're going to need

maintenance, etc., etc., right? So

option B is going to be the best. And

that's basically how I look at um a leap

option as well. Right? I'm choosing

option B, which is the middle ground.

Okay, let's go into the mistake number

two. So, thinking that time protects

you. Okay, so I've got six months left.

I can't really lose. I got a lot of time

on this option. That's the thought that

people have right before people really

lose. You know, they're all comfortable

until boom, they get hit and they're

like, "Wow, why did this leap option

lose so much value?" A leap still loses

value on a stock that goes nowhere. It

still does lose value. It just loses

less value because it has a long time

horizon. But after six months, well, it

starts to kind of speed up and kind of

creep up on you. So you still lose value

on a stock that drifts the wrong way and

the extra time doesn't cancel that out.

It just slows it down. So basically,

you're buying more time. You're not

really buying immunity. So the scary

situation where the stock starts to

crash is still going to hurt your

overall LEAP option. You are going to

lose money. So you really need to assess

is the stock, you know, having a slight

pullback is like a building going under

construction. Okay? If it's going for a

slight pullback, but the business is

still good. Well, the building is

obviously going to rebuild and it's

going to be just fine. And typically

that does take time, but maybe it's just

the market going down and not the

company specific level. You always have

to separate market versus company

specific level. That's what I do all the

time in my coaching is because it's

emotional. When the market goes down,

people want to second guess themselves.

And my job honestly all the time when I

do my one-on-one coaching is just to

simply calm someone down and say, "Hey,

don't make a mistake right now. Just

hold a position. Don't don't freak out.

Position is fine." And sometimes that

simple, you know, guidance is what an

investor really needs. That could

literally save someone thousands of

dollars from panicking, getting

emotional, and hey, they they saw a bad

YouTube video or whatever. No, no.

That's that could be a really huge

mistake. So, um, you do have to

determine whether it's just under

reconstruction for some time or the

company fundamentally has broken down

and this is what's about to come. Some

really big wear and tear on the stock

where it's not going to be recoverable.

But a company with a broken down

fundamentals like a building with a poor

foundation, that foundation's about to

break. So, that's the second thing that

you really have to pay attention to. All