OK to Buy PEP Leaps +234% Better

Based on +25% stock price in 1 year:
LEAPS ROI = 145.53%, Margin ROI = 43.59%
LEAPS are 234% more profitable than Margin.
LEAPS Premium = 11.7% of Stock Price.

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

LEAPS vs. Margin Comparison for PEP

Stock Price: $137.17
Option Symbol: PEP280121C00140000
Option Expiry: 2028-01-21
Days to Expiration: 552 days
Strike Price: $140
Option Premium: $16.05
Live Delta: 0.6123
LEAPS Leverage: 5.23x
LEAPS Breakeven: $156.05 +13.8%
LEAPS Premium: 11.7%
Additional Greeks:
Gamma: 0.0122
Theta: -0.0183
Vega: 0.6467
Rho: 1.0438
Implied Volatility: N/A
Open Interest: 356
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Scenario Comparison

Initial Investment: $1,605.00
Exit Strategy: Sell After 1 Year
LEAPS Gain = Intrinsic Value + Time Value
187 Time Value Days Remaining
Stock MoveNew PriceLEAPS GainLEAPS ROIMargin GainMargin ROI
50%$205.76$5,765.04359.19%$1,488.3492.73%
25%$171.46$2,335.79145.53%$699.6143.59%
10%$150.89$278.2417.34%$226.3714.10%
0%$137.17$-810.46-50.50%$-89.12-5.55%
-10%$123.45$-810.46-50.50%$-404.61-25.21%
-25%$102.88$-810.46-50.50%$-877.85-54.69%
-50%$68.59$-810.46-50.50%$-1,666.57-103.84%
Stock Move: 50%
New Price: $205.76
Intrinsic Value: $6575.5
LEAPS Gain: $5,765.04
LEAPS ROI: 359.19%
Margin Gain: $1,488.34
Margin ROI: 92.73%
Stock Move: 25%
New Price: $171.46
Intrinsic Value: $3146.25
LEAPS Gain: $2,335.79
LEAPS ROI: 145.53%
Margin Gain: $699.61
Margin ROI: 43.59%
Stock Move: 10%
New Price: $150.89
Intrinsic Value: $1088.7
LEAPS Gain: $278.24
LEAPS ROI: 17.34%
Margin Gain: $226.37
Margin ROI: 14.10%
Stock Move: 0%
New Price: $137.17
Intrinsic Value: $0
LEAPS Gain: $-810.46
LEAPS ROI: -50.50%
Margin Gain: $-89.12
Margin ROI: -5.55%
Stock Move: -10%
New Price: $123.45
Intrinsic Value: $0
LEAPS Gain: $-810.46
LEAPS ROI: -50.50%
Margin Gain: $-404.61
Margin ROI: -25.21%
Stock Move: -25%
New Price: $102.88
Intrinsic Value: $0
LEAPS Gain: $-810.46
LEAPS ROI: -50.50%
Margin Gain: $-877.85
Margin ROI: -54.69%
Stock Move: -50%
New Price: $68.59
Intrinsic Value: $0
LEAPS Gain: $-810.46
LEAPS ROI: -50.50%
Margin Gain: $-1,666.57
Margin ROI: -103.84%

Equal Capital Projection


Based on +25% stock price in 1 year.
Total Capital Used: $1,605.00
Projected Stock Price (+25%): $171.46
LEAPS Gain: $2,335.79 | ROI: 145.53%
Margin Gain: $699.61 | ROI: 43.59%
LEAPS returned 234% more gains than Margin.

Based on +50% stock price in 1 year.
Total Capital Used: $1,605.00
Projected Stock Price (+50%): $205.76
LEAPS Gain: $5,765.04 | ROI: 359.19%
Margin Gain: $1,488.34 | ROI: 92.73%
LEAPS returned 287% more gains than Margin.

Based on -25% stock price in 1 year.
Total Capital Used: $1,605.00
Projected Stock Price (-25%): $102.88
LEAPS Gain: $-810.46 | ROI: -50.5%
Margin Gain: $-877.85 | ROI: -54.69%
LEAPS lost 8% less than Margin.

Based on -50% stock price in 1 year.
Total Capital Used: $1,605.00
Projected Stock Price (-50%): $68.59
LEAPS Gain: $-810.46 | ROI: -50.5%
Margin Gain: $-1,666.57 | ROI: -103.84%
LEAPS lost 51% less than Margin.
Power User Breakdown
Based on +25% stock price in 1 year.
Contract Expiration: 2028-01-21 (552 days total)
Days Remaining After 1 Year: 187 days
Option Premium: $16.05
Initial Stock Price: $137.17
Strike Price: $140.00
Projected Stock Price (+25% in 1 Year): $171.46
Price Difference (Projected - Strike): $31.46
Total Capital Used: $1,605.00

LEAPS Gain Components (Sell After 1 Year):
Intrinsic Value: $3,146.25
Time Value Remaining: $794.54
Total LEAPS Value: $3,940.79
Initial LEAPS Cost: $1,605.00
Total LEAPS Gain: $2,335.79

Margin Gain Components (Sell After 1 Year):
Shares Bought: 23
Total Stock Cost: $3,154.91
Borrowed Amount: $1,549.91
Interest Paid: $89.12
Total Margin Gain: $699.61

LEAPS vs. Margin Comparison:
LEAPS ROI: 145.53%
Margin ROI: 43.59%
LEAPS Gain: $2,335.79
Margin Gain: $699.61
LEAPS Gain Advantage: +$1,636.18
LEAPS returned 234% 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.