The difference is holding time
GAD (generally accepted definition)
Less than 1 year = Trading
So holding LEAPS for long term capital gain can be considered as investing
after. not many traders dare to trade more than $1M especially in options. Having said that, Iâm aware of a trader that trade up to $20M. Between 2002 to 2008, from a few thousand dollars to $20M trading AAPL calls/LEAPS.
When your total option portfolio past $1M then tell us. Few years ago, my option portfolio went from $75k (initial capital) to $900k+, start to scare, pull out about 50% to buy Austin SFH, recently pull out some more. So not much capital again. Holding so much $ in instruments that is so volatile and can evaporate (expiry date) is pretty scary. Didnât you read tomato writing during the down days, scaredâŚ
Normal Daily fluctuation may be between 3% to 6% level. When holding a Million means that person can see the stocks value drop or go up by 30k to 60k level in a day. When it drops 60k level, the holder must be seasoned to see the fluctuation normal. Higher the money, tougher to control emotion.