Hello! I have been holding about 3,000 shares of PLTR for more than a year with an average cost basis of $19.
Since I am now eligible for the 15% long term capital gains tax, should I sell some of my shares and buy long term calls instead, including LEAPS? What are the pros and cons of this move?
EDIT: I think a common argument for this move is that should PLTR plummet for some reason, less capital would be at risk.
Thanks!
Take long term PTLR stock gains and buy LEAPS instead?
byu/brka-brkb inoptions
Posted by brka-brkb
4 Comments
Personally I’m not a fan. If you are long term bullish, just own shares. To me, options are for shorter term trades, not emulating buy and hold. The further out and deeper ITM you go, the less leverage you get and pricing isn’t great as liquidity tends to be low. Shares have a 1 delta all the time and there’s literally no time limit so if there’s a crash you can wait as long as there are shares.
I realize that there are folks on here that swear by LEAPS. I‘m just not one of them. I’d just take your original capital out and let house money ride if you want to stay in.
Just my $.15 (inflation, you know)
the only reason i would do this is if i wanted to free up capital
No sense in this, options traditionally are useful for hedging share positions. No point in putting a time constraint on possible future gains
Check out ZEBRA strategy…