When considering option buying strategies for potentially high returns within a year, one strategy that stands out is Buying DITM (Deep In-The-Money) LEAPS. LEAPS, or Long-Term Equity Anticipation Securities, are options with an expiration date longer than one year. DITM LEAPS have a strike price that is significantly lower than the current market price of the underlying asset.
Here’s a simplified explanation of how this strategy works:
Select a Stock: Choose a stock that you believe will increase in value over the next year.
Buy DITM LEAPS Calls: Purchase LEAPS call options that are deep in-the-money. This means the strike price is well below the current stock price.
Hold or Sell: You can hold the LEAPS until expiration or sell them if the stock price appreciates significantly.
The advantage of this strategy is that it allows for a potentially high return on investment due to the leverage provided by options. However, it’s important to note that all investments carry risk, and options trading can be complex and may not be suitable for all investors. It’s recommended to consult with a financial advisor before engaging in any options trading.
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