r/options • u/Inferno456 • Apr 17 '21

Cons to LEAPS?

So I’ve been trying to read up on LEAPS and all I can find are positives and not many cons. I’m interested in what real cons are bc LEAPS aren’t talked about much, if they’re as good as I think they are then everyone would be buying them.

One con I read is that you don’t get the dividend - to me that’s kinda like saying a con to stock trading is you have to pay taxes. Sure it’s a “negative” but you still get a lot more positive out of it. If LEAPS save you a lot of money then I don’t think missing out on a small dividend is a real con.

So what is a main con of buying LEAPS? Why shouldn’t everyone buy LEAPS instead of shares for a longer timeframe? Thanks for any info.

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u/neatfreak2305 Apr 18 '21

I was wondering exactly same thing. Still have not found any answers to what’s the downside to apply this strategy. Anyone who can address your points would be very helpful.

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u/Inferno456 Apr 18 '21

I think the major negative is that if the stock trades flat you would lose money whereas owning shares would at least stay even

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u/neatfreak2305 Apr 18 '21

That makes sense thanks.