LEAP Options
LEAP Options Risk Explained
The primary risk of buying a LEAP option is losing the premium paid if the underlying does not move as expected before expiration. Volatility changes, time decay and oversized positions add to that risk.
Main risks
- Full loss of premium
- Implied volatility falling after entry
- Decay accelerating in the final months
- Concentration: large premium in a single name
Process-based risk controls
- Set planned capital per trade
- Define exit targets and an invalidation level
- Limit how and when you average down
SwingLEAP is a planning and record-keeping tool. It does not recommend trades, predict prices, or execute orders.