Lately, my followers have been screaming for more recommendations for LEAPS, or Long Term Equity Anticipation Securities.
LEAPS have the identical structure as a front month vertical bull call debit spread. The only difference is that while front month call spreads have expiration dates of less than 30 days, LEAPS go out to 18-30 months.
LEAPS also have strike prices far out of-the-money instead of deep in-the-money, giving you infinitely more upside leverage. LEAPS are actually synthetic futures contracts on the underlying stock.
Of the 11 LEAPS executed during the first half of 2023, ten made money. The best so far has been the Charles Schwab (SCHW) January 2024 $60-$65 vertical bull call spread LEAPS, which is up 58% in four months.
The only loser has been the United States Natural Gas Fund (UNG) January 2025 $14-$15 vertical bull call debit spread LEAPS, which is down 44%. But we still have 18 months until expiration and (UNG) is certain to soar once any kind of economic recovery comes in range.
The great thing about LEAPS is that the successful trades win big, up to a few thousand percent. With the losers, you only write off the money you put up.
Of course, timing is everything in this business. I only add LEAPS during major market selloffs as the leverage is so great, over 20X in some cases.
If you would like to receive more extensive coverage of my LEAPS service, please sign up for the Mad Hedge Concierge Service where you can access a separate website devoted entirely to LEAPS. Be aware that the Concierge Service is by application only, has a limited number of places, and there is usually a waiting list.
Given the numbers below, it is easy to understand why my followers are screaming for more LEAPS.
To learn more about the Mad Hedge Concierge Service, please contact customer support at support@madhedgefundtrader.com
Good luck and good trading,
John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader
The Sweet Taste of LEAPS
