Tef, is this a trick question? :-)
From one much less experienced (me) to one much more experienced (tu):
The benefit of leaps calls is about 3 times leverage over the common, avoid all short term volatility if you are bullish on the stock longterm.
The drawback of leaps calls is paying for time premium not just intrinstic value, and the need to just put them in your account and forget about them (patience!)
A benefit for leaps puts, as I've recently realized, you can defer tax (sell puts 2 years out, until you close the sale, it's not a done deal, don't pay tax in the intervening time period, yet use the cash)
A drawback for leaps puts is, again, tying up margin capacity and being patient.
What's your perspective? |
