Sold to Close a 10 contract Marvel LEAPS

On 5/26/20 I bought 10 contracts of the Marvel (MRVL) $32 LEAPS to expire 1/21/22. I’m in this position for 1 month. I hope all the readers understand my LEAPS strategy. I’m not an options buyer! However, buying LEAPS is buying options. The reason I don’t buy options is because I want Time Decay on my side. I get this when I sell options. If I want to take advantage of the leverage of buying options I make it LEAPS. This doesn’t mean I want to hold the LEAPS until expiration. I buy the LEAPS as protection against Time Decay, as opposed to buying short term options where Time Decay kills you if you don’t pick direction perfectly. I buy LEAPS, as some buy short term options, Only I pay a little more and get a lot more protection.

FACT! 80% of options bought expire worthless. You see me “Sell to Close” my LEAPS option frequently, let me know how many are losers, or expire worthless. Well, here’s another one. I just sold my 10 contracts of the MRVL LEAPS I bought in May. I paid $6.50 and I just sold for $8.77. This is a $2.27 profit on the 1000 shares. That’s $2270 in one month. This is a Return on Investment (ROI) of 35%. Yes, one month, 35%! This is the power of LEAPS with a lot less risk than buying short term options. With LEAPS if your stock take a dip you have plenty of time for it to recover. With short term options you don’t!

5/26/20 – Buy to Open 10 MRVL 1/21/22 $32.00 C @ $6.50

6/30/20 – Sell to Close 10 MRVL 1/21/22 $32.00 C @ $8.77

Profit (+$2270)

Stay away from short term options! Especially of you’re a Grasshopper!

Successful trading,

Steve

The Options Coach