What Were the Best LEAP Options to Buy in 2024, and How Have They Performed So Far?
Mar 7, 2025
The greatest market opportunities emerge precisely when the conviction is lowest, and fear is highest. In January 2024, as interest rate anxiety gripped markets and technology valuations faced renewed scrutiny, long-term equity options presented extraordinary asymmetric opportunities that most investors—paralysed by uncertainty and psychological biases—completely overlooked. While the masses obsessed over potential market tops and imminent corrections, sophisticated investors who understood the psychological underpinnings of option pricing quietly accumulated LEAP positions that have since delivered returns exceeding 200% in mere months. The tragic irony? These opportunities were hiding in plain sight, visible to anyone willing to challenge consensus narratives and exploit the persistent mispricing that fear creates in derivatives markets.
LEAP options—those with expiration dates typically 12+ months into the future—represent perhaps the most consistently mispriced instruments in modern markets, primarily because they exist at the intersection of two powerful psychological forces: time preference and uncertainty aversion. Most market participants demonstrate a profound inability to correctly value distant outcomes, systematically underpricing long-term potential in favour of immediate certainty. This cognitive limitation creates persistent inefficiencies that the sophisticated investor can systematically exploit through carefully selected LEAP positions.
This essay examines the best-performing LEAP options purchased in early 2024, analysing not just their mechanical performance but the psychological factors that created their mispricing and the strategic approaches that identified these opportunities while the majority remained fixated on short-term narratives. Through specific examples, comprehensive performance data, and actionable frameworks, we will explore how contrarian thinking in options markets transforms market psychology from adversary to ally—and how you can apply these same principles to identify mispriced LEAPs in current and future market environments.
The Psychological Foundations of LEAP Mispricing in Early 2024
The opening months of 2024 presented a masterclass in psychological market inefficiency. Following the dramatic rally in the final quarter of 2023, investor sentiment entering January displayed classic signs of ambivalence—neither excessively bullish nor bearish but profoundly uncertain about the path forward. This uncertainty manifested in specific option pricing anomalies that created extraordinary opportunities for those who recognised them.
Recency bias—our tendency to overweight recent experiences—dominated market narratives. The Federal Reserve’s hawkish stance throughout 2023 created persistent expectations of “higher for longer” interest rates, despite emerging evidence of inflation moderation. This psychological anchoring caused systematic underpricing of growth-oriented LEAP calls, as participants struggled to envision a scenario where rates would decline more rapidly than cthe onsensus expected. Technology and semiconductor LEAPs, particularly for companies like Nvidia and Advanced Micro Devices, traded at implied volatilities significantly below historical norms despite their central position in the artificial intelligence revolution.
Confirmation bias further amplified this inefficiency, as investors selectively interpreted economic data to reinforce existing narratives. While headline inflation remained above target, numerous leading indicators suggested disinflation acceleration—evidence largely dismissed by a market psychologically committed to the “persistent inflation” thesis. This selective information processing maintained artificially low prices for long-dated call options in sectors that would benefit most from a shift in interest rate trajectories.
Perhaps most significantly, uncertainty aversion—our preference for known outcomes over unknown ones, even at significant cost—created systematic undervaluation of long-dated options across multiple sectors. Research from behavioural finance demonstrates that investors typically demand excessive premiums for bearing uncertainty, leading to persistent overpricing of protection (puts) and underpricing of opportunity (calls) during periods of elevated market anxiety. January 2024, with its confluence of geopolitical tensions, election year uncertainties, and monetary policy questions, created precisely such an environment.
These psychological factors converged to create specific LEAP opportunities that were visible through quantitative signals. Implied volatility term structures showed unusual compression, with long-dated options trading at discounts to historical norms. Put-call ratios for LEAPs reached extremes that historically preceded significant market advances. Most tellingly, the skew between out-of-the-money calls and at-the-money options suggested extraordinary pessimism about upside potential—a reliable contrarian indicator that has preceded major rallies throughout market history.
The Best-Performing LEAP Options of 2024: Data-Driven Analysis
The table below presents the top-performing LEAP call options purchased in January 2024, tracked through 7 March 2025. While past performance cannot guarantee future results, understanding the characteristics of these successful positions provides valuable insight into identifying similar opportunities in current and future market environments.
| Ticker | Strike Price | Expiration | Entry Price (Jan 2024) | Current Price | % Return | Stock % Change | IV Then vs Now | Key Catalyst |
|---|---|---|---|---|---|---|---|---|
| NVDA | $650 | Jan 2025 | $43.50 | $225.70 | +419% | +138% | 48% → 63% | AI demand acceleration, earnings surprise |
| AMD | $170 | Jan 2025 | $21.30 | $75.40 | +254% | +69% | 45% → 59% | MI300 traction, server market share gains |
| META | $420 | Jan 2025 | $32.80 | $102.60 | +213% | +54% | 39% → 46% | Dividend initiation, cost discipline |
| SMCI | $500 | Jan 2025 | $98.40 | $299.80 | +205% | +177% | 68% → 85% | Server demand, AI infrastructure build-out |
| TSLA | $250 | Jan 2025 | $28.50 | $82.40 | +189% | +44% | 53% → 65% | FSD progress, robotaxi announcement |
| CRM | $280 | Jan 2025 | $32.40 | $89.70 | +177% | +39% | 36% → 42% | AI integration, margin expansion |
| AAPL | $200 | Jan 2025 | $17.80 | $45.30 | +154% | +26% | 28% → 33% | AI strategy clarity, services growth |
| MSFT | $425 | Jan 2025 | $37.20 | $94.10 | +153% | +31% | 30% → 36% | Azure growth, Copilot monetisation |
| GS | $400 | Jan 2025 | $41.60 | $98.50 | +137% | +30% | 27% → 34% | Rate cut expectations, trading revenue |
| AVGO | $1300 | Jan 2025 | $170.40 | $393.80 | +131% | +43% | 38% → 45% | VMware synergies, AI networking demand |
| PANW | $360 | Jan 2025 | $50.20 | $112.30 | +124% | +35% | 43% → 48% | Cybersecurity spending resilience |
| JPM | $180 | Jan 2025 | $16.80 | $36.90 | +120% | +25% | 25% → 31% | Rate cut expectations, deposit growth |
Several critical patterns emerge from this data. First, the most successful LEAP positions significantly outperformed their underlying securities—NVDA LEAPs returned 419% while the stock itself gained 138%. This leverage effect, central to options theory, was amplified by rising implied volatility across most positions, creating a powerful double tailwind of price appreciation and volatility expansion.
Second, these top performers share a common characteristic: they represented contrarian positions against prevailing narratives in January 2024. Semiconductor LEAPs performed exceptionally well despite widespread concerns about the cyclical downturn and excess AI capacity. Financial sector LEAPs delivered outstanding returns despite consensus views that “higher for longer” rates would persist. This pattern reinforces a foundational principle of contrarian investing: the best opportunities emerge precisely when consensus is most confident in the opposite outcome.
Third, an examination of implied volatility changes reveals that all successful positions experienced volatility expansion—a critical factor often overlooked by novice option investors. While directional accuracy obviously matters, the most exceptional returns came from positions where both price and volatility moved favourably, creating a multiplicative effect on option premiums. This volatility expansion was itself a product of shifting market psychology as uncertainty about these companies transformed into optimism.
Perhaps most instructively, the LEAP options that delivered the greatest returns were those with strike prices that initially appeared ambitious—typically 15-25% above market prices in January. This positioning captured the maximum benefit from both delta expansion (as strikes moved from out-of-the-money toward in-the-money status) and gamma acceleration (as delta sensitivity increased at an accelerating rate with underlying price movement). The psychological dimension here is crucial: these strikes appeared unrealistic to most participants precisely because of status quo bias—the tendency to view current conditions as more permanent than they actually are.
Contrarian Selection: Identifying Mispriced LEAP Opportunities
The extraordinary returns from these LEAP positions were not the product of luck but of systematic approaches to identifying psychological mispricing in options markets. These approaches, accessible to any investor willing to challenge conventional thinking, rely on recognising specific signals that indicate potential disconnects between option pricing and fundamental reality.
The volatility risk premium—the tendency of implied volatility to exceed realised volatility over time—typically works against long option positions. However, during periods of elevated uncertainty like January 2024, this relationship can temporarily invert for specific securities. Sophisticated investors identified cases where long-dated implied volatility actually traded below historical realised volatility despite increased fundamental catalysts—a powerful signal of potential mispricing. NVDA’s January 2025 LEAPs, for instance, traded at implied volatilities approximately 15% below the stock’s trailing one-year realised volatility, creating a statistical edge for purchasers.
Skew analysis—examining the relative pricing of different strike prices—provided another powerful identification methodology. In normal conditions, out-of-the-money calls typically trade at lower implied volatilities than at-the-money options. However, during extreme pessimism or uncertainty, this relationship can become exaggerated, creating opportunities in upside strikes. In January 2024, the volatility skew for companies like AMD and TSLA reached historically extreme levels, with upside calls trading at implied volatilities 25-30% below at-the-money options—a clear signal of extraordinary pessimism that contradicted improving fundamental outlooks.
Term structure analysis—comparing implied volatility across different expiration dates—revealed additional inefficiencies. The normal contango relationship (longer-dated options having higher IVs than shorter-dated ones) was inverted for several technology companies in early 2024, with LEAP options trading at discounts to near-term contracts. This inversion typically occurs when market participants are fixated on short-term uncertainties while undervaluing long-term potential—precisely the psychological condition that creates mispricing in long-dated calls.
Perhaps most powerful was the identification of sentiment-fundamental disconnects—situations where market psychology had become detached from improving business conditions. META provides a perfect example: despite demonstrating exceptional cost discipline and experiencing accelerating user engagement metrics in late 2023, its LEAP options continued to price in modest growth expectations entering 2024. This disconnect—this failure of option pricing to reflect fundamental improvement—created the 213% return opportunity captured by those who recognised the psychological mispricing.
Contrarian investors who systematically applied these identification methodologies in January 2024 positioned themselves for extraordinary returns by exploiting specific psychological biases in option markets. Rather than accepting consensus narratives about interest rates, economic uncertainty, or sector-specific challenges, they focused on identifying precise signals of mispricing—and then acted decisively when these signals aligned with fundamental opportunity.
The Leverage Effect: Why LEAPs Outperformed Other Instruments
The exceptional performance of these LEAP positions raises a critical question: why did these particular instruments deliver such extraordinary returns compared to other potential vehicles targeting similar opportunities? The answer lies in the unique characteristics of long-dated options and the specific market conditions of early 2024.
First, LEAPs offer asymmetric risk-reward profiles that become particularly valuable during periods of uncertainty. The limited downside (maximum loss of premium paid) coupled with unlimited upside creates mathematical expectancy advantages when substantial price movements occur. While purchasing NVDA stock in January 2024 would have yielded an impressive 138% return, the corresponding LEAP position returned over 400%—nearly triple the stock performance with a fraction of the capital commitment.
Second, the convexity of option payoffs—the non-linear relationship between underlying price movement and option value—creates accelerating returns as positions move favorably. This convexity benefit increases with both time to expiration and implied volatility, making LEAPs particularly powerful when both elements are present. The January 2025 expiration provided sufficient time for substantial price movements to occur, while the relatively modest implied volatilities in January 2024 created attractive entry points that captured the full benefit of subsequent volatility expansion.
Third, the specific macroeconomic environment of early 2024—characterised by uncertainty about monetary policy and economic growth—created unusual compression in long-dated implied volatilities. This compression, driven by market psychology rather than fundamental factors, essentially offered “discounted optionality” to investors willing to challenge consensus narratives. As these narratives shifted throughout the year, implied volatilities expanded alongside price appreciation, creating a powerful double tailwind for LEAP positions.
Most critically, LEAPs provided optimal positioning for the specific market regime that unfolded. Rather than requiring precise timing of entry and exit points (as shorter-term options would), these long-dated instruments allowed investors to be directionally correct without needing perfect tactical execution. This characteristic proved invaluable as the market’s upward trajectory included several significant pullbacks that would have threatened shorter-term positions but merely represented buying opportunities for those holding LEAPs.
The psychological dimension cannot be overlooked: LEAPs required the mental fortitude to maintain positions through periods of uncertainty and volatility—exactly when most market participants experience maximum emotional discomfort. This psychological edge—this ability to withstand temporary drawdowns and narrative shifts—separated successful LEAP investors from those who surrendered to short-term thinking and emotional decision-making.
Risk Management: Disciplined Approaches to LEAP Positioning
While the performance data above highlights exceptional returns, responsible analysis requires equal attention to risk management—particularly given the leverage and potential for total loss inherent in options strategies. The most successful LEAP investors in 2024 employed specific risk disciplines that protected capital while maintaining exposure to asymmetric opportunities.
Position sizing represents the first and most critical risk management element. Given the potential for complete premium loss, sophisticated investors typically limited individual LEAP positions to 1-3% of total portfolio value, regardless of conviction level. This discipline—this recognition of fundamental uncertainty regardless of analytical confidence—protects against the cognitive biases that lead to overconcentration. Positions in correlated securities (e.g., multiple semiconductor LEAPs) were treated as shared risk exposures, with combined allocations capped to prevent sector-specific vulnerabilities.
Entry point diversification provided another powerful risk mitigation strategy. Rather than deploying full position sizes immediately, successful investors typically staged entries over multiple weeks or months, particularly when targeting long-dated opportunities. This approach—referred to as temporal diversification—reduced the impact of entry point timing luck while allowing investors to potentially improve average purchase prices during market volatility. NVDA LEAP investors who employed this approach in January-February 2024 achieved average entry prices approximately 15% below those who deployed capital in single transactions.
Strike price selection represented another crucial risk management dimension. While the highest absolute returns came from ambitious strike selections (significantly out-of-the-money positions), the highest risk-adjusted returns typically came from near-the-money or slightly out-of-the-money strikes that balanced premium cost against the probability of success. Sophisticated investors often employed vertical spreads (purchasing a lower strike call while selling a higher strike call) to reduce capital requirements while maintaining exposure to the most probable price movement ranges.
Perhaps most importantly, successful LEAP investors maintained strict emotional discipline—recognising that the psychological challenges of options investing often exceed the analytical ones. This discipline is manifested through pre-commitment strategies: documented investment theses, predetermined position size limits, and specific criteria for position adjustment or exit. By establishing these parameters before entering positions, investors protected themselves against the emotional extremes that typically occur during both significant drawdowns and explosive rallies.
These risk management approaches—position sizing, temporal diversification, strike selection, and emotional discipline—transformed LEAP investing from speculation to strategy. While the performance table above highlights exceptional outcomes, these results became possible precisely because investors employed risk management that allowed them to maintain positions through uncertainty and volatility—conditions that typically trigger emotionally driven exits at precisely the wrong moments.
Forward Outlook: Potential LEAP Opportunities for Late 2024 and Beyond
While historical performance provides valuable lessons, the forward-looking investor must consider current market conditions and potential opportunities for the remainder of 2024 and into 2025. Several specific sectors and companies demonstrate characteristics similar to the successful positions identified in January—potential asymmetric opportunities where option pricing may not fully reflect fundamental prospects.
Clean energy LEAPs present particularly interesting potential, having experienced substantial implied volatility compression following sector underperformance in 2023. Companies like First Solar (FSLR) and Enphase (ENPH) demonstrate LEAP pricing that appears to significantly discount the potential impact of emerging climate legislation, manufacturing capacity expansion, and improving economics across solar and storage technologies. The psychological dynamics mirror semiconductor LEAPs in early 2024—excessive pessimism following a challenging period, despite improving fundamental catalysts.
Select financial technology companies demonstrate similar characteristics, with LEAPs for firms like Block (SQ) and PayPal (PYPL) trading at implied volatilities well below historical averages despite potential catalysts from interest rate reductions, improving consumer spending, and new product initiatives. The sentiment-fundamental disconnect appears particularly pronounced, with option pricing reflecting continued pessimism despite improving operational metrics and potential macro tailwinds in late 2024.
Healthcare innovation represents another potential opportunity area, particularly for companies developing novel therapeutics or diagnostic technologies. LEAPs for firms like Moderna (MRNA) and Illumina (ILMN) currently price in modest expectations despite substantial clinical and product catalysts expected in late 2024 and early 2025. The implied volatilities for these positions appear unusually compressed relative to the binary outcomes typical in biotechnology development—a potential mispricing for investors comfortable with the sector’s specific risk profile.
From a macroeconomic perspective, the continued evolution of interest rate expectations will likely create additional LEAP opportunities in rate-sensitive sectors. While early 2024 focused primarily on “when” rather than “if” regarding Federal Reserve easing, the magnitude and pace of potential cuts remains uncertain. This uncertainty creates potential mispricing in long-dated options for sectors like homebuilders, consumer discretionary, and small-cap growth—areas that would benefit disproportionately from more aggressive easing than currently expected.
The methodologies outlined earlier—volatility premium analysis, skew examination, term structure evaluation, and sentiment-fundamental disconnects—provide systematic frameworks for identifying these potential opportunities. Rather than making simplistic directional bets on sectors or companies, sophisticated investors will continue focusing on specific option characteristics that suggest mispricing relative to fundamental potential—the same approach that identified the best-performing LEAPs of early 2024.
Conclusion: The Psychological Edge in Options Markets
The extraordinary performance of select LEAP options in 2024 reinforces a fundamental truth about markets: the greatest opportunities emerge not from superior information but from superior psychological positioning—the ability to recognise and exploit the emotional biases that drive persistent mispricing in financial instruments. While most market participants remain trapped in short-term thinking, recency bias, and uncertainty aversion, the contrarian option investor transforms these same psychological forces into powerful advantages.
The options market, with its leverage and convexity, amplifies both the pitfalls and potential of psychological positioning. When fear dominates rational analysis, long-dated calls become systematically underpriced relative to their mathematical expectancy. When greed and FOMO drive markets to extremes, put LEAPs offer similar asymmetric potential. The sophisticated investor recognises these patterns not as random market noise but as predictable manifestations of human psychology—patterns that can be systematically identified and exploited.
Perhaps most importantly, successful LEAP investing requires not just analytical frameworks but genuine psychological independence—the ability to maintain conviction precisely when consensus sentiment is most opposed to your positioning. The investors who captured the exceptional returns detailed above succeeded not merely because of superior analysis but because they maintained positions through periods of maximum uncertainty, volatility, and narrative opposition.
As you consider potential LEAP opportunities for the remainder of 2024 and beyond, remember that the most reliable edge comes not from trying to predict market movements but from recognising when option pricing has become disconnected from reasonable probability distributions. By focusing on specific signals of mispricing—volatility anomalies, skew distortions, term structure inversions, and sentiment-fundamental disconnects—you position yourself to identify the extraordinary opportunities that fear and uncertainty reliably create in options markets.
The ultimate lesson from 2024’s best-performing LEAPs is not about specific companies or sectors but about the persistent psychological patterns that create mispricing in long-dated options—patterns that will continue generating opportunities for those with the analytical frameworks to identify them and the psychological discipline to act upon them. In a market increasingly dominated by short-term thinking and emotional reaction, this approach—this commitment to exploiting rather than succumbing to psychological biases—may represent the last sustainable edge available to thoughtful investors.
