5 Best LEAP Options to Buy for 2022

what's going on option investors my name's henry and if you're new i'm starting a series on options because that's my area of expertise where i work for goldman sachs and in this video i'm going to explain to you guys what are leap options why they are so important how you can make a lot of money with them and how they work in the benefits that you get so make sure to stick around before i jump in and flood your pockets with money make sure you smash the like button for uncle henry and subscribe to the dopest youtube channel out there i'm going to start off by explaining buying call options and in the next video i'll explain selling call options and then i'm going to give you five leaps that i'm interested in holding for 2022 which is a long time so i'm very confident and i have a lot of belief that they have very high growth potential i've been right on the money in the past and i think these leaps are going to be printing some money so first of all an option is agreement between two people buying a call option is betting on a stock rising and going upwards so a call option is just a contract that allows the buyer to purchase 100 shares of stock at the call option strike price now a leap is the same as buying a regular call option except it is farther out in terms of its date that's why it's pretty much a leap the only difference is a leap is very very long out and it's usually three six or even longer in terms of months and most of the time it could be even a year long so option traders typically put on a position that is much lower in terms of length of time it's usually between 30 to 60 days until expiration meaning that their stock prediction is usually falling within a one month to two month time frame but a leap is superior to a short-term option because it gives you so much more time than just 30 to 60 days it gives you many months to work with and during that time the stock may have at least one but even better it might have two earning releases which obviously moves the stock a whole lot this gives the option investor a lot more time to work with and leaps greatly magnified returns as opposed to just holding stock which ties up a whole lot of capital leaps generally allow you to invest way less money and you still get to own and benefit when the stock rises but you don't have to put in as much capital and have it tied up all right with that being said let's jump into a couple examples i'm going to be sharing my screen i'm going to be showing you guys my portfolio and we're going to go over my five top leap plays and we're going to start off with my top leap call option pick on tesla all right guys so let's take a look at my account right here i usually don't share this so if you're watching this you're a true fan because a lot of people don't watch my option videos but you guys know that my option videos are pure gold and i back up what i say i do because if you take a look at my one year results i have done pretty pretty well i would say and if you take a look at my option positions here on the side i'm going to go over my current option positions and then obviously i'm going to give you guys five different leads i'm going to start off with tesla but i want to show you guys first that tesla is one of the best options to be trading and i have a lot of longer term leaps on tesla specifically call options so because i have so much of my portfolio in tesla i tend to go ahead and sell call options because that generates pretty much weekly and monthly and longer term income for me and so for me right now i have a 750 call option expiring on july 2nd so these are more of my short term picks and again i have a different portfolio where i also do a lot more credit spreads i have a credit spread currently on nvidia but if you take a look here i have credit spreads on tesla expiring later in july so that's up 550 but what i really want to show you guys and i just want to go over all these positions because i want to be transparent especially if you're a regular viewer of my option videos i really want to reward you guys because i'm trying to educate you guys as much as possible so you know i'm selling 820 calls and the reason why i'm selling different strikes is because i pretty much want to diversify because just in case tesla might go to you know maybe 760 that's totally fine i'm ready to lose some shares of tesla at 760 but here at 820 it's a higher strike price so if tesla goes up to 820 i won't have to lose my shares until it reaches a 20 and honestly there's another thing that i teach in my course which is rolling options i'm not going to get into that because that is way harder that's more of a tough subject to talk about but as you guys can see here i'm consistently selling call options and that's one of the best ways to generate income but i don't have any positions here where i bought call options however i am planning to buy some call options which i'm going to discuss with you guys shortly just wanted to show you some of these results here and just to um give you guys an opinion here and just to show you the longer term place here i am going out for january 21st and that is pretty much a six month option from today and what i'm doing here is i'm bullish i'm selling credit put spreads and i'm selling puts because i want more shares of tesla in my other account i'm buying a whole lot more call options but honestly i do a lot of that in my ira because when the option does end up going in my favor you end up usually making a whole lot of money and i don't really want to pay taxes on those short-term gains and with options they're always taxed in terms of short-term gains so i do a lot of that in my ira but we're going to be looking at tesla call options right now on my screen so i'm going to type in tesla and i'm going to go to call options so the market's closed because i don't want options to be fluctuating right now i want to make this video because since we're buying long-term leaps we're buying long-term call options we don't really want them to be fluctuating it's much easier for it just to be a closed market so what i'm going to show you guys is buying call options you want to go out a long term view because essentially again as i said before you get earnings events so you get i think tesla has earnings in august and then three months after august will be in november so if we're going to go out all the way to january then tesla is going to experience two different earnings events and on average you guys know that on earnings day stocks tend to move a whole lot so tesla has some good news it's gonna absolutely explode you're gonna make a lot of money holding options now so january 21st if you take a look at this um by the way let me quickly show you guys the difference in terms of premium if you go for a short term option um maybe it's you know just a couple weeks out so let's click july 16 right here if i go and look at you know let's say we're gonna go up to the 800 call okay guys so this is what a lot of traders do and this is what a lot of investors do wrong they end up losing money because they go for like an 800 call when tesla is currently at 680 and sure the premium is 3.45 cents or 345 dollars but if i click here further you take a look at the delta this means that there's a nine percent chance that this option is actually going to expire in the money means you have a nine percent chance of success um i don't know last time i checked but nine percent chance is very low this is what most people do they end up buying call options kind of swinging for the fences hoping that they're gonna hit a home run but what ends up happening is you just end up losing 345 dollars because by july 16th tesla doesn't have too much news it doesn't have too much going on sure it might go up but will it go from 680 to 800 i'm a tesla bull and i don't think it's going to do that so that's why i'm saying call options are better when you go a little bit longer in terms of date and usually you guys see my portfolio i'm usually selling call options but if i'm going to be buying call options i definitely want to be buying leap options so again let's go back to january 21st and i showed you it was 3.45 cents or 345 bucks super cheap i understand not everyone is going to have the ability to uh for this option pay 7 200 so here this would be a 7 200 trade but hold on let me tell you why this is relevant for you and maybe you might not be able to afford it in the current moment but you don't have to do this on test labs so many more plays here for you guys apple palin's here neo and starbucks that i'm going to be getting into in this video so don't rush let me educate you guys first so here what's going on is when you pay 7 200 you're actually going to have the ability to control 100 shares and that's very powerful because if you wanted to buy 100 shares of tesla right now in the open market 680 times 100 shares would be 68 000 so you would need to invest 68 000 to get control of 100 shares but here with this call option which is a leap which has a much higher chance of success by the way we saw before there was a nine percent chance of success here we have 43 percent chance of success so it is much more likely in your favor that this option will go up and you don't have to wait for it to expire by the way guys you can go through one earnings event on august and decide to sell it at the end of august for a profit you don't have to have the money available to buy 100 shares you can sell options at any time you wish you can buy them and when you have some gains and you're happy with those gains you can honestly just sell the option and take the profits off the table so for 7 200 you can control 100 shares of stock so what ends up happening is this is a very good play that i'm interested in that i have in my other portfolio because i personally think that after two earnings events we can see tesla inch up higher and maybe it'll be you know say one thousand dollars per share so here what you would end up doing and this is how much profit you would end up making is tesla is currently 800 but we're paying set you know 72 bucks our break even 72 bucks by the way 7200 because each option is worth 100 shares i will say that again so at 872 that is our break even price so at one thousand dollars if tesla reaches one thousand dollars again maybe it won't i don't know i just think tesla will go up i think it might be 920 doesn't matter as long as it's above 872 you will start generating profit you will start to break even at 872 and everything above there is just juicy profits at expiration but before expiration if tesla ends up going higher in the short term this option will become more expensive which is a fantastic thing because you can sell that option for a profit so for example let's say you buy this option and then in a couple weeks tesla ends up being um you know maybe it is seven hundred and twenty dollars so it goes up forty dollars from the current um price what delta is is saying how much that option will increase again delta has two different definitions one definition is the probability the option will expire in the money so 43 chance at expiration this option will expire in the money but it's also the relative movement of the option so if the stock goes up a dollar the option will go up 43 cents because you just take a dollar you multiply by the 0.43 so this option will make you money if tesla goes to 720 that's 40 bucks 40 bucks times .43 that's about 17 17 bucks so 17 bucks is actually 1 700 bucks so you can make 1 700 bucks in a couple weeks off of a 7 200 investment which would be over 20 returns again i'm doing the math right in my head right now it's probably going to be about 22 23 so even higher than 20 percent and that is fantastic because where else in the stock market can you make over 20 uh consistently in just a couple of weeks with options you can do that so that's why i like this leap option because for one tesla can go up in the short term and you can end up making money on your leap option or if tesla goes up long term into january 21 then you end up making really good money after your break-even point of 872 dollars here on the screen so that's my first play i hope that wasn't too much of a explanation right now so we're going to go into the second play right here and that second play is apple so apple is a fantastic stock that i like as well obviously apple is a blue chip apple is a stock that so many people hold in their portfolio and if we take a look at the three-month chart i mean apple is up 12 apple has been doing pretty well although it has sold off from april um into may in june it has had phenomenal performance if i take a look at the one year it's up 54 guys so what i can see here is we have reached top you know obviously we had some consolidation we reached another top and now we're trying to retest the top so i can see apple going back to over 142 per share i think that's very possible especially since you know most of the time in the fall apple tends to do really well especially when they have their iphone releases their product releases i think apple is going to do extremely well so let's take a look at a leap option for apple right here and again i'm going gonna go down to uh january 21st it's just a very easy date to work with it's about six months if you guys can wait six months you'll make some money in my opinion especially on some of these good stocks that are likely to go to go up because essentially apple and tesla and helen's here these are all in neo and starbucks these are all growth stocks that have upward trajectories so when i looked at the technical charts these stocks are consistently hitting all-time highs and especially with all the printing going on right now with the market i can only expect more money to be pouring into the stock market and i do expect a lot of these stocks to hit more all-time highs so again looking at apple it's 136 dollars what i'm going to do is for january 21st i'm going to go out to 150 because you guys want to go out just a little bit away from the current strike price because it's 136 dollars you can go for 140 by the way guys i have nothing wrong with you buying a hundred and forty dollar apple call options because you know when apple and if and when i think apple will go up you will be benefiting regardless of what strike you pick as long as you're long call options because you're betting for the stock to go up so regardless if you pick the 140 the 145 or the 150 you will be benefiting however this is what i want to tell you guys this is the con the comparing the contrast between the 140 and the 150. the 140 right here is going to have more delta which is a good thing if you're have a little bit more capital so if you have a little bit more capital then you can go for the closer to the money strike because you're going to be benefiting more you're going to be benefiting about the option is going to be going up about 48 of the stock so the stock goes up a dollar you're gonna be making 48 cents on your call option you're going to be participating with the stock more closely now the 150 here's the benefit it costs less in terms of premium so you only have to pay 535 dollars for the rights for 100 shares rather than 883 however the 150 um strike is going to have a lower delta so when the stock goes up a dollar in terms of owning the call option you're only going to be making 34 cents so you need the stock to move a lot more for you to eventually break even in january of course again the same applies if apple ends up moving in the short term you'll be making money you'll be participating with the stock going up in terms of your option so really both of these options are good so it's hard for me to decide between the 140 and the 150 because it kind of depends on your situation if you have a little bit more capital i would just say go on the 140 strike because you're going to be ending up making a little bit more money if apple goes to say 155 or 160 because right here on the 150 the break even is 155 so you know you can double your money in terms of this case scenario if you buy the 150 if apple goes to 160 because essentially your breakeven is 155. if you go up to 160 you make about five bucks and you spend about five bucks here at 140 if it goes to 160 you actually end up making 12 and you only spent eight so you end up a little bit more than doubling your money you end up making you know about what is it twenty dollars you make twenty dollars and you spend eight so you do a little bit better buying the 140 strike here than the 150 if apple goes to 160 per share however if apple goes to some astronomical amounts it's still probably better for you to go for the 140 because you're going to be participating a little bit more really with apple you want to go closer to the money rather than farther from the money however if you have less capital then there's nothing wrong with buying a little bit farther out of the money in fact if you're really bullish on apple i'm pretty bullish on apple i think we can see 160 maybe 165 or 170 per share you can even go for the 160 strike and you'll have a much lower investment to begin with so again my second play is apple and you can go for the 140 the 150 or the 160. there really is no true right answer there is no way for me to say buy the 150 this is guaranteed however i will tell you that all three of these picks are likely to make money and it just depends on your situation if you want to invest a little bit more capital to begin with or if you want to hit a little bit more of a long shot there's nothing wrong with hitting a little bit more of a long shot however i personally would probably go with the 140 and that's what i'll be doing on monday all right the next stock i'm going to be trading and i'm going to go a little bit faster here i'm going to give you guys a little bit less explaining and more of the answers here because i've already explained to you guys how these call options work so again palance here palancier is a phenomenal play palancier has a long-term growth story and let me actually go back to the palantir chart palancher has not been having a whole lot of results in the short term it is up 15 percent but if i go to the three-month chart i know that um it was previously a 30 stock so here we had highs of about 35 39 and a lot of people were excited thinking that palantir was going to go to 100 and by the way i love palantir the ceo went to my high school central high school it's a phenomenal high school in philadelphia and i think that this company is going to great places i really do think so it's a good software company has very good stable margins it has a lot of government contracts a lot of government relationships so as you guys can see that it was oversold at 18 per share this was a cheap stock i was telling all the people in my private discord that this was a cheap stock that you have to invest in this is a stock that i absolutely love long term and we can see here from may that it has been rising it has been doing really well it's currently at 26 dollars so i don't know if it can go back to 39 per share right you know it's almost impossible to say that even warren buffett doesn't know exactly what price the stock will be so i'm not going to predict the price of balance here however in my strong opinion in the research that i've done i think this is a 100 stock long term however in january 2021 i'm not really sure if it's going to be 100 because that is a very aggressive price target in the short term but i think we can possibly see let's say 40 dollars per share so saying that it might be 40 per share let's see what type of option would make sense for us to purchase so the good news about pallets here is there's a lot of different strike options there's a lot of variation that you can pick from basically 28 29 30 31 so it's very tight so you can play around with the strike prices a lot and again you just want to go for a call option that makes sense for you in terms of a good delta and a good delta is something above 30. you don't want something below 30 because what that means is you have a less than 30 chance of being successful and that's just too low you're spending money and i would ideally like you guys to have a higher than 30 chance so for me 40 chance is phenomenal so right here a 40 delta is phenomenal the 32 strike looks good it's 263 dollars and the break even is three 34.63 per share let's just call it thirty five dollars if pounds here were to end at forty dollars per share you would make about over five hundred dollars on a 263 dollar investment or essentially you're turning 263 into over 750 because again you're profiting 500 500 plus 263 is about 763 dollars you're able to triple your money guys this is insane in six months you can triple your money with palantir stock and volunteer options leap options to be specific if you buy the 32 strike however of course if pouncer goes to let's say 37 you still end up doubling your money even at 37 hours per share your break even is 34.63 so you end up making about 250 bucks and you only invest about 250 bucks so you end up having a 500 return and you spend 263 so you double your money at about 37 dollars per share so palance here is my third pick guys palantir is a fantastic stock long term in the short term it has gone up 15 in one month but you know there's no saying we'll stock go 15 again because past returns don't give you any expectation of what's going to happen in the future just because you know in football maybe this quarterback gave three good passing shots and i don't i don't really watch football so much but if you have three good passing shots it doesn't mean the next game he's gonna have three good passing shots or you know you know what i mean guys pass returns especially in investing don't indicate future results you just can't say that so for me palantir is a very strong stock and i wouldn't bet on it in the short term i would honestly sell options in the short term because selling options is a better way to generate income but longer term buying a leap option for january 21 fantastic just a fantastic return potential here so the fourth stock that i have is neo you guys know i love neo tesla is my number one position and now neo is my number two position i said that this was a 50 stock and lo and behold it's around 50 per share so it's going to trade neo options and without making this video too long i'm just gonna go to january 21st you guys already know that's a good expiration date because it's six months from pretty much six months from today and for me i would look at the 60 dollar strike price because neo is on the upward trajectory towards the end of the year we might see 70 or 75 dollars per share and if we do see 70 or 75 per share around the january time frame then the break even here is 66 dollars we're paying 653 to buy this sleep option however at 75 dollars per share you're going to be about 15 worth of profits so 15 divided by you know the six dollars you're gonna be about two and a half times your money so roughly two and a half times your money or about 250 percent return i mean guys please just just sign me up for 250 return because that's astronomically high and again the reason why it's high is because buying call options is riskier than selling call options i teach people how to consistently sell call options but buying call options is a little bit more risky there's a lot more money that you can make but of course you guys can see the returns are high because there is tremendous risk all right guys the last one is starbucks and with the pandemic pretty much being over and a lot of people going back to work i think a lot of people are gonna be needing that coffee because who wants to wake up early go to that nine to five job just be trading options i'm just joking half joking about that so people need caffeine to function i'm kind of a coffee addict myself i love drinking coffee now start drinking it every morning and i think starbucks is gonna absolutely kill it all right looking at the chart right here so starbucks is currently trading for 112 dollars and it has actually had not much performance in the past three months which is a good sign because once they come in with earnings and people realize that people are starting to drink coffee again and specifically investors start to realize people are drinking a lot of coffee and starbucks comes in with some good numbers just like nike just came in with some good numbers recently then starbucks is going to jump higher and starbucks was shedding as high as 117 dollars and i don't think it's going to be a problem for starbucks to go past 120 by january so taking a look at different options that we have available to us again going to january 21st i would look at the 120 dollar strike so here this option is 418 dollars the break even is 124 dollars in 18 cents and again for me i think that starbucks can go to you know maybe 130 i don't know if it can go to 150 by january but even at 130 that would be about a 20 um return from the current levels 130 dollars would be about 600 dollars worth of profit or in other words we would be making about 10 dollars per share on a four dollar investment so you would again double and a half your money so again this is a 250 return so for me these are all plays that i'm looking at these are all plays that i'm going to be investing in in terms of leap options for january because they all have tremendous returns i'm not going to be putting my entire portfolio into them because most of my portfolio is in tesla neo but i think starbucks is a phenomenal play so there you have it the top five stocks buying leap options on are likely to crush it and make all kinds and all sorts of money if you want to learn how to produce weekly income and create cash flow or what i call the money machine consistently and safely without having to take a lot of risk or waiting impatiently for a stock to grow then definitely check out the link in the description to the brand new option income academy where i go over my option calls picks and plays in real time breaking down the thought process and where you guys can mimic my trades you will also get very hands-on access with me as well as my team of six and seven-figure coaches click the application link below and see if you guys qualify also don't forget be aggressive in learning but be safe

Channel: Invest with Henry

Views: 96,386

Rating: 4.9127274 out of 5

Keywords: leaps, options, options trading, calls, call option, call options, leaps 2022, apple options, Tesla options, pltr options, six options, option trading, stock options, invest with henry options, leap options, options to buy

Id: WL2u7dO_QrA

Length: 24min 52sec (1492 seconds)

Published: Thu Jul 01 2021