A highly-lucrative market approach … Louis Navellier’s new investment service … a real-world example of how it can 3.5X even a triple-digit stock return

Today, let’s add another tool to your investment toolkit that can make you a lot of money.

It’s not particularly complicated. It just requires an awareness of how the strategy works, the conditions under which it performs best, and a comfort with its inherent risk/reward.

On that last point, yes, as with any market approach, there is some risk. But when done wisely, this strategy can explode your returns — while potentially being less risky than buying a stock outright.

What we’ll talk about today are long-dated call options.

Now, if you’re new to calls, don’t worry. We’ll explain everything in simple terms. But before we get to that, let’s add some context to why this is our topic.

In short, after years of requests from his subscribers, legendary investor, Louis Navellier, just launched a new investment service called Power Options.

It blends his quant-based market approach that targets fundamentally-superior stocks, with long-dated call options, which can be like kerosene on a fire — turning respectable market gains into triple- or quadruple-digit winners.

You might think of Power Options as Louis’ time-tested system on steroids.

From Louis:

Throughout the years, my subscribers have asked me to use my proprietary, market-beating system, which has enabled me to beat the market by 3-to-1, to trade options. They thought it would be the perfect tool to help implement even greater gains that I’d been known for.

And achieve them without taking on excessive risk.

I took this as a challenge and crunched trillions of data points and explored the financial markets at a depth I’ve rarely explored before.

As it turned out, my subscribers were right.

 

***Understanding a long-dated call option … and why they can be so lucrative

Options have an undeserved, bad reputation.

In past Digests, we’ve compared options to a vehicle. When used properly in the hands of a responsible adult, a vehicle is an amazing tool providing mobility, comfort, and convenience. But when used in the hands of an inexperienced teenager driving recklessly, it’s a dangerous weapon.

The issue isn’t the vehicle itself, it’s the actions of the person operating it. It’s the same with options.

The long-dated call options we’re about to discuss aren’t fundamentally dangerous. They just need to be used thoughtfully and purposefully.

So, let’s start at the top — what is a long-dated call option?

We’re going to call them by their official name, which is LEAPS. That stands for Long-Term Equity Anticipation Security.

What a LEAP does is give its owner the right to buy a stock up until some specified date in the future (usually between 12 and 24 months) at a specified price.

For instance, imagine your call option gives you the right to buy, say, Coke at, $51. In 10 months, it’s trading at $63 — you still buy it at $51. So, that $12 difference is pure profit (minus what you paid to buy this option).

So, LEAPS give investors exposure to the long-term upside in a stock, without having to buy the actual stock itself at the outset.

As you’re about to see, this can mean big returns-on-capital with less risk.

Take the hypothetical, Acme stock, trading at $242.50.

You think Acme is going to climb to $270.

You could buy 100 shares of Acme. That would cost $24,250.

If Acme’s price climbs to $270, then you’d make $2,750 ($270 – $242.50 x your 100 shares).

But let’s say Acme surprised you, and instead, lost 20%.

Well, suddenly, you’re out $4,850 (20% of your initial $24,250 capital).

Not good.

Compare that to a simple call option …

Instead of spending $24,250 to buy 100 shares of Acme, you could spend, call it, $630 to buy a single call option at Acme’s price of $242.50.

You’re able to do this because options provide investors leverage. One call option controls 100 shares of an underlying stock. Basically, options enable your money to go further.

Now, first, let’s start out with the bad possibility — say Acme’s stock plummets …

Even if Acme’s stock goes from $242.50 to $0, you only have $630 at risk with your call option. That’s the most you can lose. Compare that to the Acme shareholder who is down $4,850 if Acme drops just 20%.

But it gets even better when we look at returns …

Let’s say Acme climbs to $270 as before.

This time, your call-option profit is $2,120 (the same profit as earlier, $2,750, but this time we have to subtract the cost of your option, which was $630).

“Wait,” you say, “my profit is less when I use the call option than it was when I bought the stock outright. How is that better?”

Here’s how …

The Acme stock-owner put up $24,250 and made a return of $2,750. That’s return on capital of 11.3%.

Meanwhile, the Acme call-option-buyer put up $630 and made a return of $2,120. Yes, this is fewer dollars in your pocket, but on a percentage-basis return, you just made 337%.

And remember, you did this with less capital exposed to a complete loss.

That’s the power of call options used wisely.

Now, there are other details we’d need to cover before you should ever make your own trade, but this gives you a general overview.

 

***How Louis blends long-dated calls with his quant system

 

With this basic understanding of calls behind us, let’s turn to Louis.

As you likely picked up on in our description above, call options can make you a lot of money, way more than just the stock itself — if — the stock rises to the price you want, within the timeframe you want.

If it doesn’t, then you’re out the money you paid for that call option. That’s the risk for a buyer.

This means that picking solid-performing stocks that are able to climb to a specified price-target (and hopefully, well-beyond) is critical for this system to generate big returns.

And that’s where Louis’ quant-based service comes in …

Here’s Louis:

I realized that the key to a successful options trade hinges on picking the right stock, based on superior fundamentals.

Most investors get caught up in “hunting” for the perfect option at the perfect price. But they fail to consider the most important element to the entire equation: the underlying stock.

The reality is when options are used improperly, that trade is nothing short of gambling. It’s why it’s critical that before we pick the option, we pick the right company that we know has the potential to climb higher because of its strong fundamentals.

When you choose randomly, odds are high that you’ll be left holding the bag after the smart money flees the stock.

So, I took this new-found knowledge and created Power Options.

The premise is simple: Use long-term equity anticipation securities, known as LEAPS, to leverage the gains from fundamentally superior stocks with explosive potential.

Through LEAPS, we have at least a year to benefit from the underlying stock’s movement, which also helps limit our risk.

My proprietary system scours nearly 5,000 stocks per week and pinpoints those with growing sales and earnings that are sure to move higher over the next year or two. But that’s just where things begin.

Once I’ve found the right stock, I do a second deep dive to find the safest, most lucrative LEAP options for maximum gains.

 

***A real-world example of the power of LEAPS

Last November, Louis teamed up with our macro specialist, Eric Fry, to launch a “10X Disrupter” technology portfolio.

Well, it turns out that one of Eric’s favorite strategies involves, you guessed it, LEAPS. In fact, in his service, The Speculator

, many of his biggest winners have come thanks to LEAPS.

Let me show you with one real-time example …

Last spring, Eric was bullish on the mining company, Freeport McMoRan (FCX). So, on March 27, 2020, he recommended his subscribers buy an FCX LEAP.

Over the last 12 months, FCX has surged.

From March 27, 2020 through Feb 18, 2021, FCX stock climbed 388%, as you can see below.

But that’s nothing compared with the gains that Eric’s LEAP option returned for Speculator subscribers who acted on his official recommendation …

They locked in a profit of 1,350% as their option soared from $1.64 to $24.

That’s roughly 3.5X the stock return.

That’s the power of a well-chosen LEAP on a well-chosen stock.

 

***While this example highlights Eric’s winner, the strategy is similar to the one that Louis is utilizing in Power Options

And in case you’re wondering if it’s too complicated to follow, here’s Louis:

I am especially proud that my new Power Options service is easy for brand-new options traders and pros alike.

My recommendations are very straightforward and easy to follow.

Bottom-line, using LEAPS is a powerful way to make triple- or quadruple-digit returns in the market — potentially, with less money at risk than buying a stock outright. It’s hard to argue with that FCX example …

The key is picking the right underlying stock, and that’s where Louis has exceled for decades.

To learn more, you can watch a free replay of Louis’ recent Project Lightspeed event, where he dove into more details. Just click here.

By the way, if you’re nervous about the market today, using LEAPS could be a great answer.

You wouldn’t have to invest your entire capital into a stock, risking a crash — yet you could enjoy that stock’s gains if churns higher.

All the while, you’d know exactly how much risk you’d be taking on, as it would be the price of your call option. And you could dial that up as much or as little as is right for you.

Again, to learn more, click here. At worst, you’ll be a more-informed investor — at best, you’ll have a tool that could help you make returns that are multiples higher than normal stock gains.

Have a good evening,

Jeff Remsburg