Hi Sam,
You're asking a number of really great questions. I'll tell you what I know about LEAPs purchases, as well as my own style of buying them, but there are others here who are more experienced than I in buying LEAPs.
First, Leaps, by virtue of the fact that they're long term options, move less on an intraday basis than do shorter term options, so you're not going to have the fast market conditions that you do in the short term options market, which should make buying them a little less stressful.
Second, if I were buying LEAPs today, I'd be buying the 2002 series, since approximately nine months prior to expiration, LEAPs begin to "act" like regular short term options and lose some of their juice. Since it's April now, there are only eight months to go on the 2001's. This you already know, though. :)
There are differing thoughts about whether to buy ITM or OTM. I usually by 20% to 25% OTM for three reasons 1. I'm buying on pullbacks 2. I'm buying growth stocks which move quickly 3. The lower premium means I can buy more.
Your question about buying LEAPs on five different stocks in one day is a toughie. Perhaps get completely set up before the open by deciding on your strike prices and symbols and opening up a number of options chain windows so you can get quotes quickly.
All in all, it sounds like you've got a good plan on great stocks at a great time in the market for LEAPs purchases. Let us know how you do. |
