My 10 rules for trading options:
1. Only trade stocks you'd want to own
2. Sell 30 DTE puts near 0.20 delta
3. Close at 50% profit and move on
4. Buy LEAPs with 360+ DTE minimum
5. Low IV to buy, high IV to sell
6. Size so no single trade kills you
7. Liquid names only - tight spreads
8. Diversify - correlation kills accounts
9. Wait for RSI to confirm your entry
10. Have an exit plan before you enter
Break these at your own risk.
After 10 years of trading LEAPs, I've narrowed it down to one setup.
The setup:
- Weekly RSI drops below 30
- Buy 360+ DTE calls
- Go 10% OTM
- Sell half at 100% gain
- Let the rest ride until 60 days left
This setup only appears 2-3 times per year. Max.
When it hits, don't buy your normal size. Buy an uncomfortable amount.
The entries are rare. Your size shouldn't be.
Results on this setup:
- $IREN: 1000% gain
- $HOOD: 700% gain
- $AMKR: 300% gain
Most people buy 10 LEAPs per year and break even.
I buy a few LEAPS per year and 10x my money.
The secret to LEAPs isn't the strike or the expiration.
It's the patience to wait for the perfect entry.
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