Hey everyone!
Looking at the market sentiment, it looks like the sell-off is slowly ending. Here's a potential LEAPS candidate if you want to consider starting a position.
MSFT | $234.81
MSFT is a Steady Eddie and is resilient during many market pullbacks. If you want to consider starting off with a low-risk underlying stock, you can consider this to be your LEAPS candidate. If you are brand new to LEAPS, we would recommend going for around a delta 0.70 or 0.80 to start out. Remember that the higher the delta, the more intrinsic value there is in the option, which is what we want as an options buyer.
Here is the current chart for MSFT, which is trading at $234.81:
Here is the option chain for the January 20, 2023 expiration date:
Here are the stats for a delta 0.70 LEAPS option for MSFT:
Stock: MSFT
Stock Price: $234.81
Expiration Date: 2023-01-20
Action: Buy
Type: Call
Delta: 0.70
Strike: $200
Investment: $5620
You can set your limit sell order for around $400-500, meaning that you can sell your LEAPS for $6020 or $6120. If you want to hold it for a longer duration, you can also consider selling it 1-2 weeks before the next earnings date sometime towards the end of April.
Remember to start with a small position. LEAPS options are derivatives of the underlying stock and have magnified price movements. Since these are Delta 0.70 LEAPS, this means that for every $1 move up of the underlying stock, your LEAPS option will gain $70. However, it can also go the other way where if the underlying stock drops $1, your LEAPS option will lose $70 in value. Please trade and invest responsibly. 🙏
Stay disciplined and profitable! 😎
-Steve and the Call to Leap Team
The following article is strictly the opinion of the author and is to not be considered financial/investment advice. Call to Leap LLC and the author of this article does not claim to be a registered financial advisor (RIA) or financial advisor. Please visit our terms of service and privacy policy before reading this article.