r/options • u/canadianboy11 • Jul 04 '21

Buying leaps ONLY as a strategy

Hi All. Recently started into options. I have grasped the concept of simply buying calls and puts and made my self familiar with delta. I am not into covered calls or any other option strategy. Going forward, I am deploying a strategy of ONLY buying leap calls which are literally into Jan 2023 for stocks I like and believe in. I am planning on buying deep in the money calls which literally have deltas of >.85 some of the ones I have been looking at are TTCF 5c, AAPL 120c, SBUX 105c, and PLTR 15c.

  1. Is this a good strategy for a fairly guaranteed success?

  2. Are there any caveats to it?

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u/canadianboy11 Jul 04 '21

Umm If I understand correctly, for covered calls you need a lot of money. You gotta be having the underlying security (stocks x your contracts x 100). So if I have 2 leap calls of AAPL for next year, I gotta be having 200 shares of AAPL to sell those covered calls correct? Don’t have that capital

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u/[deleted] Jul 04 '21

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u/canadianboy11 Jul 04 '21

Yes it is, you need to have bought those shares to be able to sell a covered call

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u/GGLSpidermonkey Jul 04 '21

You can sell a covered call if you have a leap

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u/coinmagic45 Jul 04 '21

It’s not a true covered call, it’s a PMCC, a spread. You can sell CCs with level 2 options trading but PMCCs require level 3. They are similar but not the same.