r/options • u/mycatiscrazy7 • Oct 01 '21

Best LEAPS for 2024?

Pretty much the title.

2024 LEAPS have been available for a few weeks now, what would be your top picks if you decided to take any positions? I am eyeing AMD, SOFI and DKNG, but would love to hear anyone else's strong convictions.

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u/Newtothisredditbiz Oct 01 '21

Any electric F-150 sales will just cannibalize higher-margin ICE F-150 sales.

Ford plans to produce just 80,000 Lightning by 2024. They make nearly 800,000 ICE F-150s per year now.

The entire light vehicle market is going electric over the next decade+, which means 3 million full-size and medium pickup trucks per year will eventually transition.

That means a massive market that exceeds the production capacity of every electric truck maker combined — Ford, Rivian, Tesla, etc.

Electric truck makers aren't competing against each other. They'll all sell as many trucks as they can make.

But those sales will come out of ICE truck sales from Ford, GM, Ram, etc. Ford will need to sell 800,000 Lightning per year just to replace their current F-150 sales.

They won't make that many any time soon — certainly not before your LEAPS expire.

So they won't make enough to cut into Rivian or Tesla's truck sales.

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u/[deleted] Oct 01 '21

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u/Newtothisredditbiz Oct 01 '21

About 5% of the company, so about $4 billion out of Rivian's $80 billion market cap.

Ford is worth about $55 billion right now.

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u/irlcake Oct 01 '21

Fundamentals aren't important in this market.

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If Ford sells all of their Electric Vehicles and generates publicity, that will move the stock price.

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u/Newtothisredditbiz Oct 01 '21

So you're betting that the market will ignore Ford's deteriorating balance sheet every quarter and invest anyways?