  |
|
Investing in LEAPS Editor’s Note: Today, we have a great look at an investment strategy that not many people know about. It can be very lucrative for anyone looking to safely leverage their money. Jonas explains. Enjoy… LEAPS… An Investment Worth Jumping At
As with regular options, LEAPS plays aren’t relegated to individual stocks — LEAPS are also available for major indices like the S&P 500 and the Dow, and LEAPS are also now available for sector groups. **********Time is Running Out********** The 136-Year-Old “Millionaire’s Market” Moves Stockpiles of Money Each Day… Right Beneath Your Nose! But Today, My “Guest Pass” Gives You the Chance to Withdraw YOUR SHARE… The Millionaire’s Market doesn’t involve stocks or bonds… These millionaires could care less what the Dow Jones, S&P or NASDAQ do each day. So before it’s too late, see what really goes on in this secret market… Read on… *********************************** What’s So Great About LEAPS? So what’s so great about having options that last for more than one year? Well, for starters, having more time until expiration means that any movements the underlying stock makes can going to be a lot bigger than anything you’d see with shorter-term options. In other words, you’ve got a whole lot more gain potential with LEAPS than you do with plain options. Because of this, LEAPS are an excellent way to make long-term leveraged plays on most widely held stocks. Because purchasing $1 of LEAPS gives you several dollars of investment leverage, going long with LEAPS is a popular way of making bets on a stock. One of the best ways to achieve this over a longer period of time is by using “rolling LEAPS.” Even though LEAPS offer longer expiration dates than regular options, it may not be enough time for your investment to come to fruition. That’s where rolling LEAPS come in. With rolling LEAPS, you rollover your LEAPS when they expire by selling your current LEAPS holdings and buy the equivalent one with a later expiration date. Theoretically, you can rollover your LEAPS indefinitely. Remember, though that every time you roll your LEAPS over, you’ll have to pay for the new ones, meaning that if you do it for long stretches, your investment had better be going up enough to cover the cost of the LEAPS options! Like options, LEAPS are also a great way to hedge the stock holdings in your portfolio — especially the ones you’re planning on holding for the long-term. *********************************** Our Readers Could Have Turned $5,000 Into $1 Million in Just Over Five Years! — Steve Sarnoff, editor, Options Hotline *********************************** What’s Not to Love? Like most things, LEAPS don’t come without a caveat. Since they give you more time to realize your gains, it stands to reason that LEAPS cost more than traditional options do. How much more? Well, a General Electric call option that expires in May 2008 with a strike price of $30 costs $3.05, while the LEAP that expires in January 2010 costs $5.90 today. If you don’t plan out your investment predictions well enough, a few bad LEAPS buy could end up cutting into your portfolio performance. LEAPS and Bounds Ahead And even though LEAPS aren’t a foolproof investment tool, they are one that can put you “LEAPS and bounds” ahead of the competition if used well. Cheers, P.S.: While LEAPS provide huge moneymaking potential, you should take a look at what these Tier Two Equities will do for you. We’re talking five and six times larger profits than regular stocks…with less risk… Read on… |
|
|
|
