OK to Buy PEP Leaps +297% Better

Based on +25% stock price in 1 year:
LEAPS ROI = 175%, Margin ROI = 44.07%
LEAPS are 297% more profitable than Margin.
LEAPS Premium = 9.54% of Stock Price.

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

LEAPS vs. Margin Comparison for PEP

Stock Price: $158.21
Option Symbol: PEP280121C00165000
Option Expiry: 2028-01-21
Days to Expiration: 643 days
Strike Price: $165
Option Premium: $15.1
Live Delta: 0.5814
LEAPS Leverage: 6.09x
LEAPS Breakeven: $180.1 +13.8%
LEAPS Premium: 9.5%
Additional Greeks:
Gamma: 0.0107
Theta: -0.0185
Vega: 0.8209
Rho: 1.3389
Implied Volatility: N/A
Open Interest: 197
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Scenario Comparison

Initial Investment: $1,510.00
Exit Strategy: Sell After 1 Year
LEAPS Gain = Intrinsic Value + Time Value
278 Time Value Days Remaining
Stock MoveNew PriceLEAPS GainLEAPS ROIMargin GainMargin ROI
50%$237.32$6,597.70436.93%$1,416.9893.84%
25%$197.76$2,642.45175.00%$665.4844.07%
10%$174.03$269.3017.83%$214.5814.21%
0%$158.21$-633.80-41.97%$-86.02-5.70%
-10%$142.39$-633.80-41.97%$-386.62-25.60%
-25%$118.66$-633.80-41.97%$-837.52-55.46%
-50%$79.11$-633.80-41.97%$-1,589.01-105.23%
Stock Move: 50%
New Price: $237.32
Intrinsic Value: $7231.5
LEAPS Gain: $6,597.70
LEAPS ROI: 436.93%
Margin Gain: $1,416.98
Margin ROI: 93.84%
Stock Move: 25%
New Price: $197.76
Intrinsic Value: $3276.25
LEAPS Gain: $2,642.45
LEAPS ROI: 175.00%
Margin Gain: $665.48
Margin ROI: 44.07%
Stock Move: 10%
New Price: $174.03
Intrinsic Value: $903.1
LEAPS Gain: $269.30
LEAPS ROI: 17.83%
Margin Gain: $214.58
Margin ROI: 14.21%
Stock Move: 0%
New Price: $158.21
Intrinsic Value: $0
LEAPS Gain: $-633.80
LEAPS ROI: -41.97%
Margin Gain: $-86.02
Margin ROI: -5.70%
Stock Move: -10%
New Price: $142.39
Intrinsic Value: $0
LEAPS Gain: $-633.80
LEAPS ROI: -41.97%
Margin Gain: $-386.62
Margin ROI: -25.60%
Stock Move: -25%
New Price: $118.66
Intrinsic Value: $0
LEAPS Gain: $-633.80
LEAPS ROI: -41.97%
Margin Gain: $-837.52
Margin ROI: -55.46%
Stock Move: -50%
New Price: $79.11
Intrinsic Value: $0
LEAPS Gain: $-633.80
LEAPS ROI: -41.97%
Margin Gain: $-1,589.01
Margin ROI: -105.23%

Equal Capital Projection


Based on +25% stock price in 1 year.
Total Capital Used: $1,510.00
Projected Stock Price (+25%): $197.76
LEAPS Gain: $2,642.45 | ROI: 175%
Margin Gain: $665.48 | ROI: 44.07%
LEAPS returned 297% more gains than Margin.

Based on +50% stock price in 1 year.
Total Capital Used: $1,510.00
Projected Stock Price (+50%): $237.32
LEAPS Gain: $6,597.70 | ROI: 436.93%
Margin Gain: $1,416.98 | ROI: 93.84%
LEAPS returned 366% more gains than Margin.

Based on -25% stock price in 1 year.
Total Capital Used: $1,510.00
Projected Stock Price (-25%): $118.66
LEAPS Gain: $-633.80 | ROI: -41.97%
Margin Gain: $-837.52 | ROI: -55.46%
LEAPS lost 24% less than Margin.

Based on -50% stock price in 1 year.
Total Capital Used: $1,510.00
Projected Stock Price (-50%): $79.11
LEAPS Gain: $-633.80 | ROI: -41.97%
Margin Gain: $-1,589.01 | ROI: -105.23%
LEAPS lost 60% less than Margin.
Power User Breakdown
Based on +25% stock price in 1 year.
Contract Expiration: 2028-01-21 (644 days total)
Days Remaining After 1 Year: 279 days
Option Premium: $15.10
Initial Stock Price: $158.21
Strike Price: $165.00
Projected Stock Price (+25% in 1 Year): $197.76
Price Difference (Projected - Strike): $32.76
Total Capital Used: $1,510.00

LEAPS Gain Components (Sell After 1 Year):
Intrinsic Value: $3,276.25
Time Value Remaining: $876.20
Total LEAPS Value: $4,152.45
Initial LEAPS Cost: $1,510.00
Total LEAPS Gain: $2,642.45

Margin Gain Components (Sell After 1 Year):
Shares Bought: 19
Total Stock Cost: $3,005.99
Borrowed Amount: $1,495.99
Interest Paid: $86.02
Total Margin Gain: $665.48

LEAPS vs. Margin Comparison:
LEAPS ROI: 175.00%
Margin ROI: 44.07%
LEAPS Gain: $2,642.45
Margin Gain: $665.48
LEAPS Gain Advantage: +$1,976.97
LEAPS returned 297% 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.