200. How to make 50% annual return on LEAPS options riskfree - I cracked the options markets!
Here is a way to make 50% or more each year on your investment with LEAPS options:
You invest let's say $10,000 (you can loan this money over 5 years and pay $200 per month)
Then $6,000 you invest in LEAPS call options of your favorite stock, $4,000 in LEAPS put options of your favorite stock.
With an increase of 20% of the stock price, your call options double and are worth $12,000.
With an increase of 40% of the stock price, your call options quadruple and are worth $24,000.
With a decrease of 20% of the stock price, your put options double and are worth $8,000.
With a decrease of 40% of the stock price, your put options quadruple and are worth $16,000.
When the stock price stays flat and you bought 2-years LEAPS options, the call and put options are still worth 70% of their original value (2 years LEAPS are 30% more expensive than 1 year LEAPS)
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So you pick the highest predictable performing stock and buy LEAPS calls and puts (60% in call LEAPS, 40% in put LEAPS)
You divide your capital (like $10,000) and spread it over 5 investments, like $2,000 per stock in call and put LEAPS options, or $1,200 (60%) in call LEAPS options, $800 (40%) in put LEAPS options.
You choose 2-year options, not 1-year options in case the stock doesn't move, you make 70% back.
Then some stocks will increase by 40% or more and you double (or make 140% return) your investment money.
Some stock will increase by only 20% or more and you make 20% return.
Some stock don't move, and you make 70% back on your investment, so you lose 30%.
Some stock go down by 20% or more and you recover your investment.
So in case you choose 5 out of 10 stocks that move up by 40% or more, you have doubled your stock options investment on those stocks.
On average, you could make 50% return each year almost riskfree as you spread your investments over multiple stock options.
