Think about today being an opportunity to look further past your own two feet and think about the future. The short term future like spring/summer. Six Flags will be recovering and although I am bullish on the stock I do expect a price drop. Now is a good chance to position yourself for the uptick of their traffic coming back through the doors and kids going to amusement parks again. By mid summer / summer's end this should be in position. A Longterm Equity Antici Pation Security or LEAPS is a good play to make ........Instead of having to buy the stock for 100 shares $4350 I can reduce my upfront cost by buying a LEAPS in the long term expiring options chain (120-180 days or 240-360 days) currently the contracts for the $45 dollar strike price is going for $8.30 a share which means it will cost me $830 instead of $4350.....Now if I did a Call Vertical Spread and Bought one call and sold another to keep the distance of two strike prices (45/47.50 strikes) the difference would cost me $1.10 or $110 dollars to control 100 shares of six flags for six months! So you clearly understand what that means in the market is that I am betting in six months the price of six flags will be at least 47.50 in six months. So I only have to see it rise in 4 dollars total for me to be highly profitable. My return percentage at the end of expiration would be phenomanal it would cost me 110 dollars to make 140 dollars for the return that is 120% return on my money in six months. If i wanted to scale it I could buy 10 contracts for $1110 and make $1400 dollars for the same percentage. 120% is a far greater return than buying the stock out right $4350 and it going up $400 only which is less than 10% return. Less money upfront bigger returns and less risk. This is the value of learning the long term strategies instead of only focusing on the daily action.
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