there are a plethora of options (pun intended) and you covered a lot of them.
you don't mention what you paid for the LEAPS, when you purchased them, and how long it took to get from 100 to 150. that plays into the equation. as of course volatility. I venture to say that any stock that rises 50% in a period of a few days, weeks or months is pretty volatile. ATM, you couldve paid $25 or $50 for those calls.
other options include writing 1/02 LEAPS calls against your long calls, turning your position into a bear spread w/ probably a nice credit; to capture a temporary downturn... of course you could just sell your calls (temporarily). it really depends on your outlook ST or LT, and the risks you're willing to take.
In particular, I like your alternative 5 or simply holding until expiration. try not to factor paying taxes (whether ST or LT) into your strategy decision. you're better off paying taxes on a profit rather than using a loss as a deduction :-)
and lastly, don't forget your leverage diminishes the more ITM your LEAPS become. at 150, your LEAPS are likely at .9 delta, at 175 probably effectively 1. so any further upmove will be 1:1. these are approximate since volatility will affect delta.
disclaimer: I don't trade LEAPS. |
