1. Who is the Subscription Service for?
As with “option to Profit,” the LEAPtoProfit subscription service is intended for people who are at the same stage of life, as I.
That is, a reasonably sized stock portfolio and with a desire to enhance return, but without frequent trading.
Did I mention close to or at retirement age?
Unlike “Option to Profit” which was based upon frequent trading to generate income flows to replace employment related income during a phase or early retirment, LEAPtoProfit employs far less trading and is less reliant on a frequent infusion of income.
Additionally, OptionToProfit sought to protect asset value while generating significant regular cash flows, while LEAPtoProfit seeks to grow asset value while offering some downside protection and episodic and smaller cash flow, similar to the frequency of dividends.
2. What is a “reasonably sized portfolio?”
I think that most portfolios should contain 10 or more stocks, ideally in a broad range of sectors. The basis behind LEAPtoProfit is the selection of “anchor” positions that might typically be found in a “buy and hold” portfolio, such as blue chip positions offering safe dividend payments.
The concept of buying gradually into a full position and the ability to “Leapfrog” shares, requires that positions be of sufficient quantity to mitigate trading expenses on a per share basis.
I tend to believe that the minimum portfolio size to execute such a strategy is $500,000.
To put that into perspective, however, if Microsoft was to be a core holding, at $100 per share, a $500,000 portfolio with equal weighting of 10 positions would allow 500 shares of Microsoft to be purchased.
In the case of Leapfrogging, I would generally consider owning 3 or 4 lots of shares with the end goal of coalescing those shares into a single lot and then selling LEAPS on that lot.
However, in the case of a $100/share stock and a $500,00 portfolio, the cost factor may be more significant than with a larger portfolio.
Therefore, an individual must decide whether to maintain a smaller number of stock positions or select those stocks whose per share price allows the holding of sufficient shares in order to create an economy of scale with regard to trading costs.
3. How do I find out about trades?
If you selected the Trading Alert option, you will be sent either a text message or an email with-in a moment or two of the trades having been executed in my own trading accounts.
If you are a Web Access trader the trades will appear in the “Recent Trades” page within 5-10 minutes of their execution. That page automatically refreshes every 60 seconds, although individuals may use automatic page refresher add-ons to their browsers to have a more frequent refresh cycle.
Since the horizon is more long term oriented, a small entry price difference is not as critical of a factor as it was when implementing the “Option to Profit” strategy.
4. How often will I be trading?
Certainly not as frequently as with Option to Profit, but the number of trades will depend where in the cycle you are at migrating to a LEAPS hedged based portfolio.
At the early stages, particularly as shares are accumulated in any specific position, there will be more frequent trading, possibly even weekly sales of call options on underlying stock positions.
The idea is to get into a stable portfolio with 6 and 12 month LEAPS covering positions, but that is a process over time.
Occasionally, there will be new positions with an initial short term horizon and those positions may require more frequent trading or may be more frequently assigned away before much accumulation of shares has had a chance to occur.
5. Can I ask you questions?
Yes, but I’ve learned from “Option to Profit” that time is a valuable resource. That means both from the perspective of how much time I want to spend trading, writing, maintaining portfolios and communicating about all of those things.
I’m always happy to answer subscriber questions, but less so for non-subscribers than I once did.
Sorry, but I do want to enjoy the extra time less trading has given me.
If it’s a question about a trade just made, I will generally be able to answer at a moment’s notice. More general questions at random times are less likely to be answered in the same prompt manner, unless I’m really bored.
6. Can I cancel at any time?
This is a question that has perplexed me in a way.
Actually, not the question of whether you can cancel or not; of course you can cancel, but please do so before the recurring payment for an upcoming month hits, for those with monthly subscriptions. Those having annual subscriptions they will be refunded all fully unused months.
But what has perplexed me, going back to Option to Profit, is why people stayed with the subscription for as long as they did – many the entire 5 years.
Option to Profit was designed to be a subscription service that people would “graduate” from, because they would be able to apply the trading principles to their own family of favorite stocks, rather than relying on my mediocre timing and selection of new positions.
That’s not the way it worked out and I had to subsequently limit the number of Trading Alert subscribers receiving real time alerts and in turn introduced the Web Access only subscription, which was very low maintenance in terms of the subscribers, themselves..
Due to the nature of the portfolio strategy, I would now assume that when an individual subscriber reaches a portfolio of stable positions covered by 6 and 12 month LEAPS and has relatively little un-invested cash, there isn’t too much reason to maintain the subscription.
Instead, sit back and enjoy the time you’ve earned and just let your stocks keep doing the work for you.
Of course, if you want to keep paying the monthly subscription fee, there is very little likelihood that I would say “no.”