Leaps Screen

LEAPS Screen — Long-Dated Options Selection

🔍 Pre-flight checklist — LEAPS amplify everything, including mistakes

LEAPS give 5-10x leverage. Every methodology layer matters 5-10x more. Required checks before recommending a strike:

1. Macro regime is non-negotiable — trigger macro-warning. LEAPS in 🔴 RED regime is a wealth-destruction trade. RED → only suggest LEAPS on deep-value names at 200DMA, never momentum names. YELLOW → cap LEAPS allocation at 3% of book. GREEN → full plan.
2. Insider strict on the underlying — $(ls ~/.claude/{skills,plugins/claude-investment-skills}/review-investment-screenshot/scripts/insider_ratio.py 2>/dev/null | head -1) TICKER --window 90. If C-suite is distributing while user is considering a 2-year LEAPS, that's a hard NO. Form 4 code "P" only — RSU grants look bullish in headlines but aren't open-market buys.
3. 3-tier entry on the UNDERLYING, mapped to LEAPS strikes — Don't recommend "Buy Jan 2027 $1100 call at market". Map: at $current → which strike? at -20% drawdown → which deeper-ITM strike? at 200DMA → which strike? User gets 3 strikes mapped to 3 underlying levels.
4. Sizing 3-5% MAX per LEAPS — and that's only if confidence ≥ 8/10. LEAPS can go to $0; size accordingly.
5. Tax-aware exit — LEAPS held > 1 year = LTCG. If user wants to exit within 12 months, mention STCG hit and quantify it. May be worth holding 30 more days.
6. IV check — If IV > 80% annualized, premium is too rich. Recommend waiting or smaller size, not just "the strike."

"Look carefully" rule: the most expensive LEAPS mistake is buying ATM/slightly-OTM on a momentum name at 52w high in YELLOW/RED regime. Theta + IV crush + first 10% drawdown wipes 60% of premium in weeks. ALWAYS check: where's the stock vs 200DMA + what's the macro regime + has insider been selling 90d?

See README's Hard Rules for the full anti-pattern list.

What is a LEAPS?

LEAPS = Long-term Equity AnticiPation Securities. Options with >1 year to expiry. Used for:

• Leveraged long bets (5-10x leverage on capital)
• Lower capital requirement vs stock
• Defined max loss (premium paid)
• Tax efficiency (LTCG if held >1 year)

When LEAPS > Stock

When Stock > LEAPS

The 5-Step LEAPS Selection Process

Step 1 — Get available expiries

mcp__yfmcp__yfinance_get_option_dates(symbol="NVDA")

Filter to LEAPS (>1 year out). Typically:

• 2027/1/15
• 2027/3/19
• 2027/6/17
• 2027/9/17
• 2027/12/17
• 2028/1/21 (most popular)
• 2028/6/16
• 2028/12/15

Step 2 — Pull option chains for top 2-3 expiries

mcp__yfmcp__yfinance_get_option_chain(symbol="NVDA", expiration_date="2027-01-15", option_type="calls")

Step 3 — Filter strikes

Hard filters:

• OI > 1000 (liquidity, must be able to exit)
• **IV < 80%** (not too pricey, but >40% for leverage)
• Strike from ATM to +30% OTM

Goldilocks zone:

• ATM strike: 0.50 delta, 50% leverage, breakeven需 +X% (depends on time to expiry)
• +10% OTM: 0.40 delta, more leverage, harder to win
• +20% OTM: 0.30 delta, 4-5x leverage, needs big move

Step 4 — Calculate R/R for each candidate

For each strike, compute:

Step 5 — Recommend 2-3 strikes with sizing

Allocation rule of thumb:

• LEAPS = 0.5-2% of total portfolio per single position
• More than that = excessive concentration / risk
• Multiple LEAPS on same underlying: combine within 2-3% cap

Tiered sizing (NVDA example):

Output format

# [TICKER] LEAPS Screen — [Date]
**Current price**: $XXX | **Thesis**: [user's thesis or "general bullish"]

## Available LEAPS Expiries
- 2027/1/15 ([X] months out)
- 2028/1/21 ([Y] months out)

## Recommended: [Strike] [Expiry]

### Why this one
[2-3 bullet points: liquidity, R/R, IV reasonable]

### Specifics
| Metric | Value |
|---|---|
| Strike | $X |
| Expiry | YYYY-MM-DD |
| Mid premium | $X.XX |
| OI | X,XXX |
| IV | X.X% |
| Delta (est) | 0.X |
| Cost per contract | $X,XXX |
| Breakeven | $XXX (+X.X%) |
| 2x premium scenario | Stock @ $YYY (+Y.Y%) |
| 3x premium scenario | Stock @ $ZZZ (+Z.Z%) |

### Position sizing
- Suggested: X contracts = $Y,YYY total cost
- Portfolio %: Z.Z%
- Stop loss: 50% of premium ($X) or stock breaks 200DMA

### P&L Scenarios at expiry
| Stock @ Expiry | Intrinsic | P&L | % Return |
|---|---|---|---|
| Current ($XXX) | $0 | -$X (premium) | -100% |
| +10% | $X | -$Y | -X% |
| +20% | $X | +$Y | +X% |
| +50% | $X | +$Y | +X% |
| Bull target | $X | +$Y | +X% |

## Alternatives Considered (NOT recommended)
| Strike | Why NOT |
| $X | OI too low / IV too high / breakeven too far |

## Compared to Stock
- Stock $XXX: 1x leverage, no time decay, gets dividends
- LEAPS $X strike: ~Yx leverage, 12mo expiry, no dividend
- **Recommendation**: [LEAPS / mix / stock] because [reason]

## Risks
- IV crush after [event] could lose 20-30% even if stock unchanged
- If stock chops sideways, LEAPS lose to theta
- 12/18/2026 LEAPS in 2026 危险窗口 (yen carry / 1973)

## Tax considerations
- If held >1 year: LTCG (15-20%)
- If held <1 year: STCG (32-37%)
- Specific lot ID matters at exit

Hard rules

1. **OI < 1000 = skip.** Liquidity > leverage.
2. IV > 80% = warn user. "贵了，等回调或换 expiry"
3. Position size cap. Per LEAPS = max 2% portfolio. Total LEAPS = max 10% portfolio.
4. Always show breakeven %. If breakeven needs +25%, that's not a "small" move.
5. ATM vs OTM decision. ATM = safer. OTM = more leverage but lower probability.
6. Don't recommend 12/18 LEAPS in 2026. User's portfolio审计显示 12/18 LEAPS 在 5-6 月 yen carry 窗口内 = 双重风险。Recommend 2027/1+ instead.
7. Show alternatives that were considered but rejected. Transparency.

Common pitfalls

Special case: when user already owns stock

If user has 100+ shares, ask:

• "Want to add leverage with LEAPS?" → +OTM call, small size
• "Want to lock profit but stay in?" → Sell stock + buy LEAPS (synthetic long)
• "Want to hedge?" → That's earnings-prep skill, not this one

Tool cheat-sheet

Recommendation matrix (quick reference)

When to invoke

• User asks: "What LEAPS should I buy on X?"
• User asks: "Should I buy stock or LEAPS?"
• User asks: "What's the best 2027 call for NVDA?"
• User describes a thesis with 1-2 year horizon
• After analyze-stock recommends LEAPS as the vehicle