Best Stocks for LEAPS: 10 Large Caps With Cheap Vol
Ten large caps whose implied volatility sits in the lower half of its own range — the condition that makes buying long-dated calls defensible.
The Short Answer
A LEAPS call is a long volatility position whether you intended one or not. Buying a two-year call when implied volatility is at the top of its range means you can be right on direction and still lose, because the vol you overpaid for mean-reverts against you. Low IV rank is the entry condition that most LEAPS buyers ignore.
This screen requires a large market capitalisation as well, because LEAPS commit capital for a year or more and business durability matters far more over that horizon than over a 30-day trade. The combination — big, established, and currently cheap on volatility — is what makes the long-dated premium worth paying.
ApexVol screens 399 optionable names for this list, requiring a $5+ share price and 1,000+ contracts of average daily option volume before ranking. Filtered to market capitalisation above $10bn, then ranked by lowest IV rank so the cheapest volatility relative to each name's own history sorts first. Requires 1,000+ contracts average daily option volume.
30-day IV of 52% sits at the 6th percentile of its own year, so long-dated premium is near the low end. Market cap $0bn.
30-day IV of 81% sits at the 14th percentile of its own year, so long-dated premium is near the low end. Market cap $0bn.
30-day IV of 69% sits at the 15th percentile of its own year, so long-dated premium is near the low end. Market cap $0bn.
How We Ranked These Strategies
Filtered to market capitalisation above $10bn, then ranked by lowest IV rank so the cheapest volatility relative to each name's own history sorts first. Requires 1,000+ contracts average daily option volume.
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Frequently Asked Questions
What is the ideal IV rank for buying LEAPS?
Lower is better, and under 30 is the range most long-dated buyers target. You are paying for one to two years of implied volatility up front; buying that at the top of a name's range means vol mean reversion works against the position for its entire life, independent of whether the stock goes your way.
How deep in the money should a LEAPS call be?
Most LEAPS buyers use 70-80 delta. That gives you most of the stock's move with meaningfully less capital, while keeping extrinsic value — the part that decays — to a small fraction of the premium. At-the-money LEAPS carry far more time value and therefore far more to lose to decay.
Why does market cap matter for LEAPS?
Because the holding period is measured in years, not weeks. Over that horizon the business itself is the dominant risk, not the options mechanics. A screen for cheap long-dated volatility on fragile small caps would surface exactly the names where the option expires worthless for reasons no Greek predicted.
Are LEAPS better than buying the stock?
They are more capital-efficient and strictly worse if nothing happens. A LEAPS call gives leveraged upside for a fraction of the outlay, but it expires, pays no dividend, and loses value in a flat market. Shares do none of those things. The trade is leverage in exchange for a deadline.
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