Loading tonight’s option chains…
Read this first. Options are not a safer way to own a stock. A call bought for $2,000 can be worth nothing at expiry if the stock ends below the strike, and the leverage that makes a LEAP cheap works just as hard on the way down. Quotes here are delayed, midpoints between bid and ask; the price you would actually get can be worse. Educational research only, not investment advice.
The five filters
- Δ Delta 0.75–0.85. Deep in the money, so the price is mostly intrinsic value and the call tracks the stock closely.
- DTE 365+ days. 12 to 24 months to expiry. Time decay is slow in a LEAP’s first year and speeds up near the end.
- IV Volatility rank under 30. Options are cheaper when volatility is low, and less exposed to a later fall in volatility.
- Liq Open interest 500+ and a spread within 10%. LEAPS trade thinly. A wide gap between bid and ask is a cost paid on the way in and again on the way out.
- Trend Above the 200-day average. Calls work best when the stock is already in an established uptrend.
What can go wrong
A LEAP has an expiry date: the stock can be right in two years and the call still expire worthless if the move comes too late. A deep in-the-money call does not collect dividends. A Poor Man’s Covered Call caps the upside for each month a call is sold, and can be assigned early. Puts cost money every year in which nothing bad happens. And a company passing every filter here says only that the arithmetic and the option market line up tonight; it is not a forecast and not a recommendation.
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