IA Leap Compound Annual Growth Rate (CAGR) Model (Patreon)

Here is the link to the spreadsheet model: https://docs.google.com/spreadsheets/d/1h--rFFZodnw9yARlZyUN8TBhGZ7M0q-0FuH308AUOg0/edit?usp=sharing

REM HIT FIL, SAVE A COPY to download your own version

The Leap CAGR Model is a decision-making tool designed to calculate the annualized return required to break even on long-term equity anticipation securities—commonly known as LEAPS. By inputting the entry price and target breakeven point over a defined time frame, the model reveals the compound growth rate that the underlying stock must achieve for the LEAP to be profitable.

This model is a critical part of my options analysis framework. It's used to evaluate the viability of different LEAPS and to compare them against one another based on the underlying's required performance. In essence, it helps separate the LEAPS that are mathematically feasible from those that demand unrealistic growth.

The Leap CAGR Model works in tandem with other tools in my system, including a custom Black-Scholes pricing model, forming a comprehensive guide for selecting strategic long-dated options.