Part 4/9:
- LEAPS: Long-term call options that do not entail margin calls. Holding LEAPS allows investors to stay invested regardless of short-term dips, effectively avoiding forced liquidation from volatile price movements.
The author prefers LEAPS over margin due to this protective feature and the ability to "ride out" downturns without being squeezed out.
Tactical Strategies for Over-Leveraged Investors
For those with overexposure (more than 100% of their portfolio in Tesla), the advice is to trade around the margins. This entails:
Slightly reducing exposure when anticipating short-term dips.
Scaling back on options or margin to mitigate risk.
Re-entering after retracements to capitalize on the next wave of growth.