When to Roll the LEAPS Itself

You've got a LEAPS sitting in your account. Maybe it started at 0.75 delta when you bought it, nice and deep. But now? Six months later, the stock's climbed 15%, your option's nearly at parity, and the delta's pushed up to 0.92. The thing barely moves anymore, it's more like holding shares than holding leverage.

That's your signal.

Rolling the LEAPS itself isn't about ego or chasing bigger gains. It's about maintaining the mechanical advantage that made you buy a LEAPS in the first place: controlled exposure with defined risk and elastic upside. When that advantage erodes, you reset it.

The Delta Drift Problem

Here's what happens to a LEAPS over time when the underlying moves in your favor.

You start with a deep in-the-money call at 0.75 delta. For every dollar the stock moves, your option moves about 75 cents. That's leverage, you're controlling $100 worth of stock movement with maybe $25 in premium. The elasticity is there.

But as the stock climbs, delta climbs with it. At 0.85, you're moving 85 cents per dollar. At 0.90, you're at 90 cents. By the time you hit 0.95 delta, you're essentially holding shares with extra steps, and paying theta for the privilege.

The problem isn't that you're making money. The problem is you're not using the option anymore. You've drifted into stock-equivalent exposure without stock-equivalent rights. No dividends. No voting. Just time decay and a strike price that's become irrelevant.

When the Strike Gets Too Deep

A LEAPS that's too deep in-the-money stops behaving like an option. The extrinsic value collapses to nearly zero. All you've got left is intrinsic value, the difference between the stock price and your strike.

Let's say you bought a $50 strike when the stock was at $65. That's $15 of intrinsic value, plus maybe $10 of time premium for a $25 total cost. Clean.

Now the stock's at $85. Your option's worth $35, all intrinsic. The extrinsic has bled down to maybe 50 cents. You're paying theta for an option that trades like a stock position. That's inefficient capital.

This is where rolling makes sense. You can sell that $50 strike, capture the intrinsic value, and buy a new LEAPS at a higher strike, say $70 or $75, where you've got actual time value and delta back in the 0.70-0.80 range. You're resetting the structure.

Elasticity Is the Point

The real reason you bought a LEAPS was elasticity, that disproportionate return characteristic where a small move in the stock creates a larger percentage move in your option.

When you're at 0.75 delta with $25 invested and the stock moves $1, your option moves $0.75. That's a 3% gain on your capital for a 1.5% move in the stock (assuming the stock was at $65). The elasticity multiplier is doing its job.

But when you're at 0.95 delta with $35 invested and the stock moves $1, you're only getting a 2.7% gain for the same 1.5% stock move. The leverage advantage has compressed. You're still making money, but you're not making LEAPS money anymore.

Rolling down the delta ladder, selling the deep ITM call and buying a new one closer to the money, restores that elasticity. You're not being greedy. You're being mechanical. You're keeping the position aligned with why you structured it this way in the first place.

The Practical Trigger Points

So when do you actually roll?

Delta above 0.90. This is the clearest signal. Once you're consistently above 90 delta, you've lost most of the option's leverage characteristics. The position is tracking the stock nearly one-for-one.

Extrinsic value under $1. If your LEAPS has less than a dollar of time premium left, you're paying theta for nothing. The option market isn't pricing in any meaningful probability of the stock moving back below your strike.

Six months or less to expiration with deep ITM status. Even if delta hasn't spiked yet, a LEAPS with under six months left and a strike 20%+ below the current stock price is going to bleed extrinsic fast. Rolling out to a longer-dated expiration with a higher strike keeps you in the game.

Stock up 20%+ from entry. This isn't a hard rule, but it's a useful benchmark. If the stock's climbed 20% or more since you opened the LEAPS, check your delta. Odds are you're deep enough in-the-money that a roll makes sense.

None of these are catastrophic if you miss them. Your LEAPS isn't going to explode. But you're holding an inefficient structure, and inefficiency costs money over time.

Rolling Mechanics: Sell High, Buy Higher

The actual mechanics are straightforward.

You sell your current LEAPS, let's say that $50 strike we talked about, now worth $35 with the stock at $85. You collect $35 in proceeds.

Then you buy a new LEAPS at a higher strike and further-dated expiration. Maybe the $70 strike, 18 months out, costs you $22. You've pocketed $13 in cash from the roll, and you've reset your delta back to 0.75-ish.

That $13 isn't profit yet, it's a reduction in your basis. But now you're back in a leveraged position with time value and elasticity. You've extracted intrinsic value that was just sitting there doing nothing and redeployed it into a structure that actually behaves like an option again.

Some traders roll even higher, back to at-the-money or slightly out-of-the-money LEAPS. That's fine if you want to maximize elasticity, but it also means taking on more extrinsic risk and lower delta. I prefer staying in-the-money, keeping delta in the 0.70-0.80 range, because I'm not chasing moonshots. I want reliable, repeatable exposure.

What You're Not Doing

Let's be clear: rolling the LEAPS itself is not the same as rolling short calls in a PMCC structure.

When you roll short calls, you're managing the income-generation side of the position, extending duration, adjusting strikes, defending against early assignment. That's a separate decision.

Rolling the long LEAPS is about maintaining the foundation. It's adjusting the leverage layer beneath your short call strategy. You can do one without the other. Most of the time, you'll roll short calls dozens of times before you roll the LEAPS once.

And you're not locking in gains in the traditional sense. You're harvesting intrinsic value and reinvesting it into a new structure. The trade is still open. The exposure is still on. You've just moved the strike.

When Not to Roll

Not every deep ITM LEAPS needs a roll.

If you're planning to close the entire position soon, maybe you hit your target, maybe you're taking profits, there's no point rolling. Just close it and move on.

If the stock's moved down and your delta's dropped below 0.70, don't roll up into a higher strike. You'd be locking in a loss and resetting into a worse position. Better to either hold through or close entirely.

And if you're using the LEAPS as a pure stock replacement with no intention of ever adjusting, some traders do this, then rolling doesn't make sense. You're deliberately treating it like shares. That's fine. Just know you're paying theta for that choice.

The Roll Is Maintenance, Not Strategy

Here's the thing people miss: rolling the LEAPS isn't some advanced tactic. It's just position hygiene.

You bought the LEAPS for leverage. When leverage evaporates, you restore it. That's all this is.

It's no different than rebalancing a portfolio or adjusting position sizing when your account grows. You're keeping the structure aligned with the original intent.

The traders who let LEAPS sit untouched until expiration, watching delta climb to 0.98 and time value vanish, aren't being patient. They're being passive. And passivity in options costs money.

Rolling the LEAPS when the signals appear, high delta, low extrinsic, deep intrinsic, keeps you in the position you wanted to be in from the start: leveraged, elastic, and efficient.

No drama. No heroics. Just maintenance.

Probabilities over predictions,

Andy Crowder

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Disclaimer: This is educational content only. Not investment, tax, or legal advice. Options involve risk and aren't suitable for all investors. Examples are illustrative. Real results will vary. Talk to professionals before you risk real money.