LEAPS Options: Long-Term Strategy Guide 2026
LEAPS (Long-term Equity Anticipation Securities) are options with expirations one to three years out. They let you control 100 shares for a fraction of the cost — and pair perfectly with covered calls for ongoing income.
What Are LEAPS?
LEAPS are simply options with expirations beyond one year. A January 2027 call option on AAPL is a LEAP. They behave more like stock than short-dated options because their delta is high (usually 0.70-0.90) and time decay is slow.
The Poor Man's Covered Call (PMCC)
The most popular LEAPS strategy: buy a deep in-the-money LEAPS call instead of 100 shares, then sell short-dated covered calls against it. You get the covered call income with a fraction of the capital outlay.
Example: Instead of buying 100 shares of AAPL at $220 ($22,000), buy one Jan 2027 $160 call for ~$8,000. Sell monthly $230 calls against it and collect $200-400/month. Your capital at risk drops 64%.
Key Rules for LEAPS
- Buy at 70+ delta (deep enough in the money to behave like stock)
- At least 12 months to expiration — give the thesis time
- Only use LEAPS on stocks you'd buy outright (same conviction required)
- Never sell short-dated calls above your LEAPS strike (creates naked risk)
Best Brokers for LEAPS
Interactive Brokers has the most liquid LEAPS market and lowest margin rates for leveraged positions. Tastytrade for PMCC strategies. See our IBKR review.
Tastytrade is built for options traders — the best platform for covered calls, cash-secured puts, and spreads.
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