Near the close I was filled on an order to buy a Marvell LEAPS.
LEAPS stands for Long-Term Equity Anticipation Securities. Long-term equity anticipation securities (LEAPS) are publicly traded options contracts with expiration dates that are longer than one year. LEAPS are no different from short-term options except for the later expiration dates. Lengthier times until expiration allow long-term investors to gain exposure to prolonged price movements.
I did a Buy-Write with Marvell Tech Group (MRVL) yesterday and in my ‘trade reporting’ post I said I’ll be writing more about MRVL, and I will be! Before I do I have to make some changes to Main Street beats Wall Street to help explain the new strategy. The strategy is not new to me but it will be the first time I’m talking about it to you.
Marvell is a great company and I think I’ll be very involved for a long time. Today is the first position that confirms this. I bought 10 contracts that will not expire until January 21st, 2022. That’s over 2 years. I bought this option with the stock at $24. I bought the 1/21/22 $25 Call. I paid a premium of $5.20 for a total of $5200. I wanted to buy the stock, and probably will soon, but today I went with the LEAPS. If I was to buy 1000 shares of the stock I would have paid $24,000 instead of $5200 for the option. And the $24,000 would have been on margin. If I hold this option long term I will not pay margin interest.
Marvell Tech Group – LEAPS
Buy to Open 10 MRVL 1/21/22 $25.00 C @ $5.20 ($5200)
Whenever I buy options I go out a bit on the Expiration Date for protection, and normally get out way before expiration. With MRVL I think I’ll be holding this option long term. Right now this option has a Delta of .58. It will increase in value 58¢ for every $1 the stock moves. I believe this stock has the potential to move big within the next year.
Watch for my changes to Main Street beats Wall Street and my new wealth building strategy. I believe Marvell will be a big part of it!
Successful Trading,
Steve
The Options Coach