OK to Buy PEP Leaps +246% Better

Based on +25% stock price in 1 year:
LEAPS ROI = 151.11%, Margin ROI = 43.63%
LEAPS are 246% more profitable than Margin.
LEAPS Premium = 11.69% of Stock Price.

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

LEAPS vs. Margin Comparison for PEP

Stock Price: $142.19
Option Symbol: PEP280121C00145000
Option Expiry: 2028-01-21
Days to Expiration: 597 days
Strike Price: $145
Option Premium: $16.62
Live Delta: 0.657
LEAPS Leverage: 5.62x
LEAPS Breakeven: $161.62 +13.7%
LEAPS Premium: 11.7%
Additional Greeks:
Gamma: 0.0125
Theta: -0.0196
Vega: 0.6691
Rho: 1.2651
Implied Volatility: N/A
Open Interest: 305
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Scenario Comparison

Initial Investment: $1,662.00
Exit Strategy: Sell After 1 Year
LEAPS Gain = Intrinsic Value + Time Value
232 Time Value Days Remaining
Stock MoveNew PriceLEAPS GainLEAPS ROIMargin GainMargin ROI
50%$213.29$6,066.26365.00%$1,542.7092.82%
25%$177.74$2,511.51151.11%$725.1143.63%
10%$156.41$378.6622.78%$234.5614.11%
0%$142.19$-762.24-45.86%$-92.48-5.56%
-10%$127.97$-762.24-45.86%$-419.52-25.24%
-25%$106.64$-762.24-45.86%$-910.07-54.76%
-50%$71.1$-762.24-45.86%$-1,727.67-103.95%
Stock Move: 50%
New Price: $213.29
Intrinsic Value: $6828.5
LEAPS Gain: $6,066.26
LEAPS ROI: 365.00%
Margin Gain: $1,542.70
Margin ROI: 92.82%
Stock Move: 25%
New Price: $177.74
Intrinsic Value: $3273.75
LEAPS Gain: $2,511.51
LEAPS ROI: 151.11%
Margin Gain: $725.11
Margin ROI: 43.63%
Stock Move: 10%
New Price: $156.41
Intrinsic Value: $1140.9
LEAPS Gain: $378.66
LEAPS ROI: 22.78%
Margin Gain: $234.56
Margin ROI: 14.11%
Stock Move: 0%
New Price: $142.19
Intrinsic Value: $0
LEAPS Gain: $-762.24
LEAPS ROI: -45.86%
Margin Gain: $-92.48
Margin ROI: -5.56%
Stock Move: -10%
New Price: $127.97
Intrinsic Value: $0
LEAPS Gain: $-762.24
LEAPS ROI: -45.86%
Margin Gain: $-419.52
Margin ROI: -25.24%
Stock Move: -25%
New Price: $106.64
Intrinsic Value: $0
LEAPS Gain: $-762.24
LEAPS ROI: -45.86%
Margin Gain: $-910.07
Margin ROI: -54.76%
Stock Move: -50%
New Price: $71.1
Intrinsic Value: $0
LEAPS Gain: $-762.24
LEAPS ROI: -45.86%
Margin Gain: $-1,727.67
Margin ROI: -103.95%

Equal Capital Projection


Based on +25% stock price in 1 year.
Total Capital Used: $1,662.00
Projected Stock Price (+25%): $177.74
LEAPS Gain: $2,511.51 | ROI: 151.11%
Margin Gain: $725.11 | ROI: 43.63%
LEAPS returned 246% more gains than Margin.

Based on +50% stock price in 1 year.
Total Capital Used: $1,662.00
Projected Stock Price (+50%): $213.29
LEAPS Gain: $6,066.26 | ROI: 365%
Margin Gain: $1,542.70 | ROI: 92.82%
LEAPS returned 293% more gains than Margin.

Based on -25% stock price in 1 year.
Total Capital Used: $1,662.00
Projected Stock Price (-25%): $106.64
LEAPS Gain: $-762.24 | ROI: -45.86%
Margin Gain: $-910.07 | ROI: -54.76%
LEAPS lost 16% less than Margin.

Based on -50% stock price in 1 year.
Total Capital Used: $1,662.00
Projected Stock Price (-50%): $71.1
LEAPS Gain: $-762.24 | ROI: -45.86%
Margin Gain: $-1,727.67 | ROI: -103.95%
LEAPS lost 56% less than Margin.
Power User Breakdown
Based on +25% stock price in 1 year.
Contract Expiration: 2028-01-21 (597 days total)
Days Remaining After 1 Year: 232 days
Option Premium: $16.62
Initial Stock Price: $142.19
Strike Price: $145.00
Projected Stock Price (+25% in 1 Year): $177.74
Price Difference (Projected - Strike): $32.74
Total Capital Used: $1,662.00

LEAPS Gain Components (Sell After 1 Year):
Intrinsic Value: $3,273.75
Time Value Remaining: $899.76
Total LEAPS Value: $4,173.51
Initial LEAPS Cost: $1,662.00
Total LEAPS Gain: $2,511.51

Margin Gain Components (Sell After 1 Year):
Shares Bought: 23
Total Stock Cost: $3,270.37
Borrowed Amount: $1,608.37
Interest Paid: $92.48
Total Margin Gain: $725.11

LEAPS vs. Margin Comparison:
LEAPS ROI: 151.11%
Margin ROI: 43.63%
LEAPS Gain: $2,511.51
Margin Gain: $725.11
LEAPS Gain Advantage: +$1,786.40
LEAPS returned 246% 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.