OK to Buy KO Leaps +346% Better

Based on +25% stock price in 1 year:
LEAPS ROI = 192.94%, Margin ROI = 43.26%
LEAPS are 346% more profitable than Margin.
LEAPS Premium = 10.26% of Stock Price.

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

LEAPS vs. Margin Comparison for KO

Stock Price: $71.22
Option Symbol: KO280121C00072500
Option Expiry: 2028-01-21
Days to Expiration: 790 days
Strike Price: $72.5
Option Premium: $7.31
Live Delta: 0.6524
LEAPS Leverage: 6.36x
LEAPS Breakeven: $79.81 +12.1%
LEAPS Premium: 10.3%
Additional Greeks:
Gamma: 0.0299
Theta: -0.0064
Vega: 0.3874
Rho: 0.8585
Implied Volatility: N/A
Open Interest: 124
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Scenario Comparison

Initial Investment: $731.00
Exit Strategy: Sell After 1 Year
LEAPS Gain = Intrinsic Value + Time Value
425 Time Value Days Remaining
Stock MoveNew PriceLEAPS GainLEAPS ROIMargin GainMargin ROI
50%$106.83$3,190.86436.51%$672.3391.97%
25%$89.03$1,410.36192.94%$316.2343.26%
10%$78.34$342.0646.79%$102.5714.03%
0%$71.22$-242.14-33.12%$-39.87-5.45%
-10%$64.1$-242.14-33.12%$-182.31-24.94%
-25%$53.42$-242.14-33.12%$-395.97-54.17%
-50%$35.61$-242.14-33.12%$-752.07-102.88%
Stock Move: 50%
New Price: $106.83
Intrinsic Value: $3433
LEAPS Gain: $3,190.86
LEAPS ROI: 436.51%
Margin Gain: $672.33
Margin ROI: 91.97%
Stock Move: 25%
New Price: $89.03
Intrinsic Value: $1652.5
LEAPS Gain: $1,410.36
LEAPS ROI: 192.94%
Margin Gain: $316.23
Margin ROI: 43.26%
Stock Move: 10%
New Price: $78.34
Intrinsic Value: $584.2
LEAPS Gain: $342.06
LEAPS ROI: 46.79%
Margin Gain: $102.57
Margin ROI: 14.03%
Stock Move: 0%
New Price: $71.22
Intrinsic Value: $0
LEAPS Gain: $-242.14
LEAPS ROI: -33.12%
Margin Gain: $-39.87
Margin ROI: -5.45%
Stock Move: -10%
New Price: $64.1
Intrinsic Value: $0
LEAPS Gain: $-242.14
LEAPS ROI: -33.12%
Margin Gain: $-182.31
Margin ROI: -24.94%
Stock Move: -25%
New Price: $53.42
Intrinsic Value: $0
LEAPS Gain: $-242.14
LEAPS ROI: -33.12%
Margin Gain: $-395.97
Margin ROI: -54.17%
Stock Move: -50%
New Price: $35.61
Intrinsic Value: $0
LEAPS Gain: $-242.14
LEAPS ROI: -33.12%
Margin Gain: $-752.07
Margin ROI: -102.88%

Equal Capital Projection


Based on +25% stock price in 1 year.
Total Capital Used: $731.00
Projected Stock Price (+25%): $89.03
LEAPS Gain: $1,410.36 | ROI: 192.94%
Margin Gain: $316.23 | ROI: 43.26%
LEAPS returned 346% more gains than Margin.

Based on +50% stock price in 1 year.
Total Capital Used: $731.00
Projected Stock Price (+50%): $106.83
LEAPS Gain: $3,190.86 | ROI: 436.51%
Margin Gain: $672.33 | ROI: 91.97%
LEAPS returned 375% more gains than Margin.

Based on -25% stock price in 1 year.
Total Capital Used: $731.00
Projected Stock Price (-25%): $53.42
LEAPS Gain: $-242.14 | ROI: -33.12%
Margin Gain: $-395.97 | ROI: -54.17%
LEAPS lost 39% less than Margin.

Based on -50% stock price in 1 year.
Total Capital Used: $731.00
Projected Stock Price (-50%): $35.61
LEAPS Gain: $-242.14 | ROI: -33.12%
Margin Gain: $-752.07 | ROI: -102.88%
LEAPS lost 68% less than Margin.
Power User Breakdown
Based on +25% stock price in 1 year.
Contract Expiration: 2028-01-21 (791 days total)
Days Remaining After 1 Year: 426 days
Option Premium: $7.31
Initial Stock Price: $71.22
Strike Price: $72.50
Projected Stock Price (+25% in 1 Year): $89.03
Price Difference (Projected - Strike): $16.53
Total Capital Used: $731.00
LEAPS Gain Components (Sell After 1 Year):
Intrinsic Value: $1,652.50
Time Value Remaining: $488.86
Total LEAPS Value: $2,141.36
Initial LEAPS Cost: $731.00
Total LEAPS Gain: $1,410.36
Margin Gain Components (Sell After 1 Year):
Shares Bought: 20
Total Stock Cost: $1,424.40
Borrowed Amount: $693.40
Interest Paid: $39.87
Total Margin Gain: $316.23
LEAPS vs. Margin Comparison:
LEAPS ROI: 192.94%
Margin ROI: 43.26%
LEAPS Gain: $1,410.36
Margin Gain: $316.23
LEAPS Gain Advantage: +$1,094.13
LEAPS returned 346% more gains than Margin.
LEAPS Risk to Reward Score
Good Risk to Reward
90/100
Base Performance Score: 80
Bonuses: 20
  • +15 (24+ Month Expiration)
  • +5 (ATM Strike)
Penalties: 10
  • -10 (High Leverage)

Final Risk vs Reward Score: 90/100
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.