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Is the small investor getting priced out of the stock market?

Just look at the largest companies in the market today (based on market cap)… how can someone with a small trading account participate?

 

  • Apple $312 per share
  • Microsoft $162 per share
  • Alphabet $1430 per share
  • Amazon $1869 per share


Attempting to buy shares of any of these stocks can suck your trading account dry…

And that’s why I rarely ever buy high-priced stocks. 


Instead, I’ll trade options, which give me leverage.


For example,
for the same price it costs you to buy one share of Amazon, you can leverage 100 shares from the options market. 


And while most people believe options are just short-term trading instruments designed for gamblers.

They are surprised to tell them that you can actually trade options like stocks.

How?

By trading and/or investing in LEAPS.

What are LEAPS, and how can you add them to your trader’s toolbox?

 

Trading LEAPS Options

First, what are LEAPS?

LEAPS are a special kind of option that allows traders to target expirations greater than 1 year in duration.

LEAPS stands for Long Term Equity Anticipation Security.

You see… buying stocks is expensive, especially when you have a longer-term view on the outlook of the stock.

Let’s take a look at Apple comparing both stocks and options for a 1-year trade between 1/2/2019 through 12/31/2019.

For example, on Jan 2nd, 2019, Apple is trading at $158.  In order to be involved, you would purchase 100 shares which will cost a whopping $15,800.

So how would this trade break down?

Well, you could purchase the stock on Jan 2nd and sell at the end of the year.

The trade:

Buy: Jan 2nd at $158

Sell: Dec 31th at $294

Profit: $136/share x 100 shares = $13,600

Now, this is where the fun begins…

How would you like to be able to own that same amount of stock for a fraction of the price?

Well, you can, using LEAPS!

For example, if you wanted to purchase 100 shares of Apple, you could buy 1 contract of Jan ‘20 LEAPS  $21.55 or $2,155.  

The trade:

Buy: Jan ‘20 $155 at $21.55

Sell: Jan ‘20 $155 at $140.80

Profit: $140.80 – $21.55 x 100 = $11,925

Now, on the surface, it looks like you made less money.

But instead of allocating $15,800 of capital you only need to shell out a tiny $2,155.

In other words…  the ROI is mind-blowing!

The Return on Investment:

Stocks: $13,600/$15,800 = 86.07%

Options: $11,925/$2,155 = 553.36%

Not only do you get to participate in Apple’s price move higher, but you can also return the same amount as you would buying stocks all while paying 86.36% LESS!

And you can do this throughout the course of an entire year and then do it again next year and the year after that!

But wait… there’s more!  It gets MUCH more exciting!

Once you have purchased the LEAPS contracts, which lets us make money when Apple’s stock goes up while paying 86.36% less than stocks…

We can then generate income by selling Call options against our Apple LEAPS.

Here’s what this looks like…

 

 

As you can see on the left side we purchased the Apple LEAPS contract.

Then every month, we sell an “out of the money” (OTM) call option AGAINST our LEAPS contract for added income.

This allows us to bring in an additional $100-$200 or more a month (depending on other outside variables).

Click here to learn how to create your own monthly income stream today!

Eventually, as you see over on the right side, the call options and the price of Apple expires “in the money” (ITM) – meaning our LEAPS contracts must be sold (or they get turned into stock for us).

But here’s the thing…

Not only did we collect $14,080 from selling our call options (less the initial cost of $2,155)…we also made an extra $1,575 from selling our call options!

This is just from buying ONE LEAPS contract and selling ONE call option contract each and every month against it!

Depending on how much capital you have to start with, you could buy FIVE LEAPS contracts and sell FIVE calls against it each and every month.

This will generate a whopping 5 times the income, or $59,625 PLUS $7,875 per year for a total added income of $67,500!  All on initial capital of $10,775 which is STILL LESS than buying the initial stock position of $15,800!

And you can do this on multiple stocks all at once!

My commitment to you

This is an extremely safe strategy, that could see you creating your own monthly paychecks.

And this could even become a yearly income stream to double or triple your current paycheck with your full-time job in no more than 15 minutes per week!

Don’t believe me?

Just check out this testimonial of a new trader I taught how to leverage the Options Profit Planner strategy.

 

 

 

Or how about this one from a skeptical trader…

 

 

If you’d like to leverage the power of options for yourself and use this strategy for yourself…

 

Click here to learn how today!

Author: Dave Lukas

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