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LEAPS options are popular because they provide long-term stock-like exposure at a fraction of the cost of buying shares. One of the top benefits of holding LEAPS is they have slower rates of time decay compared to shorter-term options.
But how much less decay do LEAPS actually have relative to short-term options?
In this video we will analyze a few options on NVDA and look at the theoretical P/L curves for call options at various points in the future, and see how LEAPS compare. We will also explore how long it takes for LEAPS to lose half of their extrinsic value, and the shape of the decay curves.
==== Video Chapters ====
00:00 NVDA 90-Day vs. LEAPS Call Option Decay Analysis
02:29 How Long for Options to Lose 50% of Time Value?
04:20 When Options Become In-The-Money (ITM)
05:44 LEAPS Strategy With Positive Decay
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