OK to Buy PEP Leaps +243% Better

Based on +25% stock price in 1 year:
LEAPS ROI = 147.2%, Margin ROI = 42.95%
LEAPS are 243% more profitable than Margin.
LEAPS Premium = 10.87% of Stock Price.

LEAPS Premium is OK, under 40%
LEAPS outperform margin by at least 40%

LEAPS vs. Margin Comparison for PEP

Stock Price: $167.0001
Option Symbol: PEP280121C00175000
Option Expiry: 2028-01-21
Days to Expiration: 689 days
Strike Price: $175
Option Premium: $18.15
Live Delta: 0.5724
LEAPS Leverage: 5.27x
LEAPS Breakeven: $193.15 +15.7%
LEAPS Premium: 10.9%
Additional Greeks:
Gamma: 0.0097
Theta: -0.0185
Vega: 0.9009
Rho: 1.4818
Implied Volatility: N/A
Open Interest: 283
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Scenario Comparison

Initial Investment: $1,815.00
Exit Strategy: Sell After 1 Year
LEAPS Gain = Intrinsic Value + Time Value
324 Time Value Days Remaining
Stock MoveNew PriceLEAPS GainLEAPS ROIMargin GainMargin ROI
50%$250.5$6,846.69377.23%$1,656.2191.25%
25%$208.75$2,671.69147.20%$779.4642.95%
10%$183.7$166.699.18%$253.4113.96%
0%$167$-703.33-38.75%$-97.29-5.36%
-10%$150.3$-703.33-38.75%$-447.99-24.68%
-25%$125.25$-703.33-38.75%$-974.04-53.67%
-50%$83.5$-703.33-38.75%$-1,850.79-101.97%
Stock Move: 50%
New Price: $250.5
Intrinsic Value: $7550.02
LEAPS Gain: $6,846.69
LEAPS ROI: 377.23%
Margin Gain: $1,656.21
Margin ROI: 91.25%
Stock Move: 25%
New Price: $208.75
Intrinsic Value: $3375.01
LEAPS Gain: $2,671.69
LEAPS ROI: 147.20%
Margin Gain: $779.46
Margin ROI: 42.95%
Stock Move: 10%
New Price: $183.7
Intrinsic Value: $870.01
LEAPS Gain: $166.69
LEAPS ROI: 9.18%
Margin Gain: $253.41
Margin ROI: 13.96%
Stock Move: 0%
New Price: $167
Intrinsic Value: $0
LEAPS Gain: $-703.33
LEAPS ROI: -38.75%
Margin Gain: $-97.29
Margin ROI: -5.36%
Stock Move: -10%
New Price: $150.3
Intrinsic Value: $0
LEAPS Gain: $-703.33
LEAPS ROI: -38.75%
Margin Gain: $-447.99
Margin ROI: -24.68%
Stock Move: -25%
New Price: $125.25
Intrinsic Value: $0
LEAPS Gain: $-703.33
LEAPS ROI: -38.75%
Margin Gain: $-974.04
Margin ROI: -53.67%
Stock Move: -50%
New Price: $83.5
Intrinsic Value: $0
LEAPS Gain: $-703.33
LEAPS ROI: -38.75%
Margin Gain: $-1,850.79
Margin ROI: -101.97%

Equal Capital Projection


Based on +25% stock price in 1 year.
Total Capital Used: $1,815.00
Projected Stock Price (+25%): $208.75
LEAPS Gain: $2,671.69 | ROI: 147.2%
Margin Gain: $779.46 | ROI: 42.95%
LEAPS returned 243% more gains than Margin.

Based on +50% stock price in 1 year.
Total Capital Used: $1,815.00
Projected Stock Price (+50%): $250.5
LEAPS Gain: $6,846.69 | ROI: 377.23%
Margin Gain: $1,656.21 | ROI: 91.25%
LEAPS returned 313% more gains than Margin.

Based on -25% stock price in 1 year.
Total Capital Used: $1,815.00
Projected Stock Price (-25%): $125.25
LEAPS Gain: $-703.33 | ROI: -38.75%
Margin Gain: $-974.04 | ROI: -53.67%
LEAPS lost 28% less than Margin.

Based on -50% stock price in 1 year.
Total Capital Used: $1,815.00
Projected Stock Price (-50%): $83.5
LEAPS Gain: $-703.33 | ROI: -38.75%
Margin Gain: $-1,850.79 | ROI: -101.97%
LEAPS lost 62% less than Margin.
Power User Breakdown
Based on +25% stock price in 1 year.
Contract Expiration: 2028-01-21 (689 days total)
Days Remaining After 1 Year: 324 days
Option Premium: $18.15
Initial Stock Price: $167.00
Strike Price: $175.00
Projected Stock Price (+25% in 1 Year): $208.75
Price Difference (Projected - Strike): $33.75
Total Capital Used: $1,815.00

LEAPS Gain Components (Sell After 1 Year):
Intrinsic Value: $3,375.01
Time Value Remaining: $1,111.67
Total LEAPS Value: $4,486.69
Initial LEAPS Cost: $1,815.00
Total LEAPS Gain: $2,671.69

Margin Gain Components (Sell After 1 Year):
Shares Bought: 21
Total Stock Cost: $3,507.00
Borrowed Amount: $1,692.00
Interest Paid: $97.29
Total Margin Gain: $779.46

LEAPS vs. Margin Comparison:
LEAPS ROI: 147.20%
Margin ROI: 42.95%
LEAPS Gain: $2,671.69
Margin Gain: $779.46
LEAPS Gain Advantage: +$1,892.23
LEAPS returned 243% more gains than Margin.
LEAPS Risk to Reward Score
Good Risk to Reward
82/100
Base Performance Score: 80
Bonuses: 12
  • +7 (18-24 Month Expiration)
  • +5 (ATM Strike)
Penalties: 10
  • -10 (High Leverage)

Final Risk vs Reward Score: 82/100
Base Performance Score is based on how much better LEAPS perform than margin. It's calculated as (LEAPS ROI - Margin ROI) * 1.5, capped at 80.