🔒 Premium Membership Positions

Hey Advanced Traders!

Taking Profits

I want to say that I'm very happy for many of you who made quick profits with your AAPL, MSFT, AMD, and HD LEAPS. Remember that you can take profits based on your profit target. Most members and I like to take profits when our LEAPS gain around $200-300. You can also hold some of your LEAPS until a couple of days before the next earnings are announced.

V and MA

Typically with these credit card/payment stocks, they do well in the fourth quarter since this is when payment volume is highest with all the holiday shopping. However, with all the negative news that has been going around, these two stocks are unfortunately not in favor as I hoped they would. If your LEAPS have lost around 50% in value, you may want to exit your position by selling them for a loss. You can then consider reallocating your capital to another LEAPS that is in favor.

This is one of the reasons why I ask that you not use more than 10% of your portfolio in LEAPS. If you followed discipline and your LEAPS lost 50%, this would only cause a 5% dent in your overall portfolio (half of 10% is 5%).

Also, your LEAPS should have been financed by at least half of your Wheel premiums. If you sell your LEAPS with a 50% loss, you would essentially be reclaiming the capital you put in yourself.

I am still bullish on these credit card/payment stocks in the long-term. However, if Wall Street decides to not put their capital into these stocks, I want to respect the trend. Holding LEAPS and actual shares are very different things. There is much more risk holding onto LEAPS since they are depreciating assets due to their theta decay and I prefer to use my LEAPS capital elsewhere.

Cycling LEAPS

Similar to what we discussed two weeks ago, if your LEAPS increased in price and you would like to sell them, I would like you to observe the delta your LEAPS are. You will most likely notice that the delta has increased in "speed" due to gamma and the further deeper ITM your LEAPS has become. For example, if you purchased a delta 0.65 LEAPS, you may see that your LEAPS may have grown to a delta 0.70. In this case, you can consider selling your LEAPS option and reenter with another 0.65 LEAPS. What will happen is that you will profit from selling your LEAPS and you can purchase a new LEAPS with less capital. With the profit that you make, I recommend that you compound your portfolio by investing it into long-term dividend paying stocks/ETFs.

Favorable LEAPS

I am favoring MSFT, AAPL, HD, and LOW LEAPS due to their strong earnings. I would only choose LEAPS with deltas higher than 0.65. Also, since we are nearing 2022, I would only choose LEAPS with an expiration date of June 16, 2023 or January 19, 2024.

Spreading Your Risk

Again, I recommend spreading your risk over different stocks, rather than going all in on just one underlying. Just in case one of your underlying stocks falls, you can have other ones that hold strong in the short-term.

New to LEAPS

If you are new to LEAPS, it's totally okay just to paper trade for now and to observe the markets. Always make sure to understand the general idea of how LEAPS work and how the Greeks and underlying affect pricing.

Stay Disciplined

You know me and I always want to make sure your portfolios are safe, which is why I always say this at the end of these LEAPS recommendations; Please make sure you follow the LEAPS purchasing guidelines. I know several of you made hundreds to thousands of dollars this year with LEAPS, but I still recommend that you do not go overboard with purchasing 50 LEAPS at once. Yes, your account will increase at an exponential rate during a bull market. However, if we have a surprise pullback, your account value will drop significantly!

Giving To Others

For those of you who made a bit of profit this year, I ask that you do something kind for someone this Thanksgiving. Perhaps you can donate some money to your favorite charity or help a struggling family with their Thanksgiving meal.

Knowing the power of investing and trading is a privilege that many people may not have, and I think it would be a wonderful act of kindness if we could share our wealth with others, especially with ones in need.

I strongly believe that when we learn to give more freely to others, we invite more love, joy, and wealth into our lives.

Have a wonderful Thanksgiving with your friends and family! Make sure to stay safe and healthy. Great things are coming your way! 😀

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.