My Newest Trade For The Second Half of 2025

Hey everyone!

I sit here writing this a day removed from my 33rd birthday, and today I wanted to share a trade I made that’s a bit outside my usual playbook. For those of you who’ve been around for a while, you know I mostly stick to the script when it comes to option selling — a strategy that works very well.

But every now and then, I spot an opportunity worth stepping off the path for. And when you’ve been selling options as long as I have, you start to see the other side of the trade with a pretty sharp eye.

So let me introduce my newest trade and break down why I took it...

🤔 Ever Heard of LEAP Debit Spreads?

Let me explain.

A LEAP debit spread is a long call vertical spread using LEAP options — that is, options with long-term expirations, typically 9 to 30 months out.

Here's How It Works:

  • ✅ Buy a LEAP call (usually deep or at-the-money)
  • ✅ Sell a higher strike LEAP call (with the same expiration)

This strategy reduces your net premium (cost) and gives you defined risk and defined reward.

📘 It’s called a “debit spread” because you pay a net upfront cost.

✅ Why Use LEAP Debit Spreads?

Pros:

  • Lower cost than buying a LEAP outright
  • Defined risk and reward
  • Still provides strong leverage
  • Less exposed to IV crush than naked calls
  • Effective in overbought or high IV environments (think: crypto rallies)

Cons:

  • Caps your upside at the short strike
  • Needs price movement beyond breakeven to profit
  • You don’t benefit from extreme moonshots beyond the cap

💼 My IBIT Trade Breakdown

I opened a LEAP debit spread on IBIT, the bitcoin ETF.

Trade Details:

  • Bought: $70 call, Jan 16, 2026 expiration – Cost: $834
  • Sold: $95 call, same expiration – Credit: $263

👉 Net Debit (Cost Basis) = $834 – $263 = $571 per spread
👉 Spread Width = $95 – $70 = $25 per share
👉 Max Spread Value = $25 × 100 = $2,500
👉 Max Profit = $2,500 – $571 = $1,929

📊 Key Metrics

MetricValue Max Profit: $1,929, Max Loss: $571 (your cost), Max ROI: ~338%, Breakeven Price: $70 + $5.71 = $75.71

📈 Profit Scenarios at Expiration

🟢 Profit maxes out once IBIT hits $95 — you’ve captured the full spread minus your cost.

🧠 Summary

At the end of the day, I’m risking $571 per spread with the potential to earn $1,929, which is a 338% return if IBIT hits $95 or more by January 2026.

Sure, my upside is capped — but in exchange, I significantly reduced my cost basis versus just buying a naked LEAP. If IBIT doesn’t break $70, I’ll take the full loss. But I’m confident in the directional move here, and I love the tradeoff.

This is one of those strategic moments where you take what you know as a seasoned option seller… and flip it.

Let’s see how it plays out.

– Caleb

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