Having less capital is a sign that you should be putting on smaller positions. That’s the plain and simple answer. Using LEAPs for leverage is fine and good for as long as you’re lucky. When luck runs out you find out quickly that leverage works BOTH ways.
The first RadioActive trade I ever did was on AMZN when it was $16.09, October 1, 2002. I also picked up a 2005 $20 put option and was able to do this trade with only $2,500 in my account. As it turns out, that was a big enough position to do pretty well!
Now, I’m not saying that you shouldn’t trade LEAPs. Just be aware of the risks. One of the first slides last night, if you’ll recall, was of a LEAP position gone bad for a fella that picked up 35 contracts of ITM LEAPs on BSX. Very, veeery painful lesson, but he’ll never do that again.
My thought is that you should get The Blueprint and begin right now to paper trade, while at the same time consider doing plain vanilla married puts with as much capital as you do have rather than over-leveraging yourself. That’s the way to lose too much on one bad trade.
I'm Kurt Frankenberg, and I have discovered how to truly put the odds on the side on the individual investor.