Can You Really Make $10,000 a Month With LEAPS on SPY? (Honest Review)

Summary

Wealth and Health Podcast – Episode Summary
Title: Can You Really Make $10,000 a Month With LEAPS on SPY? (Honest Review)
Host: David Jaffee
Aired: May 6, 2026

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Episode Overview

In this episode, David Jaffee conducts a critical review of the popular LEAPS on SPY strategy, specifically as presented by YouTuber “Money Talk with Rashad.” The episode examines the viability of using long-term call options (LEAPS) on the SPY ETF and selling short-term calls against them—a method often referred to as a "poor man’s covered call" (PMCC)—to generate consistent monthly income, with the ambitious claim of earning $10,000 per month or 70% annual returns with relatively low starting capital. David offers an honest, skeptical assessment, emphasizing both the unrealistic expectations and the overlooked risks.

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Key Discussion Points & Insights

1. Initial Reactions & Credibility Concerns

• [01:17] David immediately questions Rashad’s claim of 70% annual returns with the LEAPS strategy:
  • “Right off the bat the probability of that is close to 0%. He's saying that you could earn 70% a year by trading LEAPS, and I believe that's bullshit.”
• [01:50] David speculates on Rashad’s source of income:
  • “My gut feeling is that he brings in multiple six figures a year from his community, not from trading.”

2. Explanation of the LEAPS Strategy (from Rashad)

• [03:00] Rashad describes SPY as a mostly upward-trending ETF but acknowledges two significant multi-year downtrends (2000–2003, 2007–2009).
• [04:13] Rashad outlines the core mechanics:
  • Buy a deep-in-the-money SPY LEAP
  • Sell monthly short calls (typically at a 0.40 delta) to collect premium income

3. David’s Critique of the Strategy

• [04:13; 06:05; 06:24; 08:03; 10:17]
  • Capped Upside: By selling calls, upside is limited and strategy underperforms the market.
    • “You're unable to participate in the upside of the leap, and you're sacrificing the upside potential.” ([04:13])
    • “That's why every single covered call ETF dramatically underperforms the market.”
  • Delta Imbalance Risk: Short call's delta can overtake long call’s, leading to net losses even when SPY rises.
    • “You could lose money on this strategy even if the underlying security goes up.” ([04:13])
  • Rolling Dilemmas: In a strong bull market, the short call can get deeply in the money, limiting options for profitable rolls.
    • “...all your buying power is going to be used up. So you're not going to be able to make any, any trades. You're essentially going to be stuck and handcuffed in a trade that's using up all of your buying power, that has no more upside potential.” ([08:03])
  • Unrealistic Return Expectations: There is no plausible way to consistently earn 70% with this approach.
    • “If the S and p averages around 12 to 13% a year, do you really think that you can five times that amount by simply buying calls and then selling cover calls against it, which is going to end up capping your upside? His entire pitch in this video does not make sense.” ([08:03])
  • Misuse of 'Salary': The income is variable and not salary-like as pitched.
    • “He's using that word 'salary', which doesn't make sense. It's my understanding that salary means that you're paid a specific amount over a course of time. But here, the amount that you're paid is always going to vary.” ([10:17])

4. Rashad’s Execution Details

• [06:12] Specifics: Buy a 3-year LEAP (e.g., Dec 2027, 70–80 delta), sell 36-day call at 0.40 delta (e.g., $597.50 strike for $7.75 premium).
• [07:23] Suggests timing sells when technical indicators (stochastic, Bollinger band) are favorable.
• [08:03] Rashad claims you can get 13 cycles and collect ~$10,075/month, implying $120,000/year from a $170,000 investment.

5. Host’s Continued Skepticism & Challenge

• [12:13; 13:14; 13:47]
  • David criticizes Rashad for not showing what to do when the short call is in the money.
    • “I'm confused. He doesn't even tell you what he's going to do once the short call becomes in the money.” ([12:13])
    • “Show an example when you have an in the money call option that's pretty deep in the money, and then show your audience what exactly you're going to do in order to roll that position and, and how much money you're going to collect. I would estimate that you're probably going to make around 8 to 10% a year using this strategy. Not 70% a year.” ([13:14])
    • “I don't think he understands this trade himself.” ([13:47])
  • Highlights the risk that the short call will be challenged frequently, especially in a bull market.
  • Argues that risk is much higher than implied and that overall returns are likely close to 8–10%—not the advertised 70%.

6. Important Listener Question Highlighted

• [15:16] David reads a skeptical YouTube comment:
  • “You said the market rarely goes up more than 5% a month. I look back in the spy experiences about three months a year of gains 5% or higher, sometimes almost as high as 10% in a month... Just over 56% of the time you would have had returns greater than the 1.35% then someone else wrote. This strategy has risk on both sides. Upside, you lose more on the call you sold than on what you bought, so your salary won't work. But the worst is the downside where you can lose 10k if the market tanks. I wouldn't follow this strategy and he's 100% right…”

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Notable Quotes & Memorable Moments

• David Jaffee [01:17]:
  “If you could earn 70% a year consistently on a base of 170,000, then after 30 to 40 years you'd probably be the richest person in the world.”
• David Jaffee [04:13]: “By selling the call option, you're unable to participate in the upside… every single covered call ETF dramatically underperforms the market.”
• David Jaffee [08:03]: “If the S&P averages around 12 to 13% a year, do you really think that you can five times that amount by simply buying calls and then selling cover calls against it, which is going to end up capping your upside? His entire pitch in this video does not make sense.”
• David Jaffee [13:14]: “Show an example when you have an in the money call option that's pretty deep in the money, and then show your audience what exactly you're going to do in order to roll that position and, and how much money you're going to collect. I would estimate that you're probably going to make around 8 to 10% a year using this strategy. Not 70% a year.”
• Listener Comment Read by David [15:16]: “This strategy has risk on both sides. Upside, you lose more on the call you sold than on what you bought, so your salary won't work. But the worst is the downside where you can lose 10k if the market tanks. I wouldn't follow this strategy and he's 100% right…”
• David Jaffee [13:47]: “I don't think he understands this trade himself.”

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Timestamps for Key Segments

• 01:17 – 01:50: David’s initial skepticism and Rashad’s introduction
• 03:00 – 04:13: Rashad explains the LEAPS/PMCC strategy setup
• 04:13 – 06:05: David’s critique of covered call limitations and risk exposure
• 06:12 – 08:03: Details on executing the trade; Rashad walks through an example
• 08:03 – 10:17: David expounds on real-world problems and flawed return math
• 12:13 – 13:14: David calls out missing risk management for in-the-money short calls
• 13:14 – 14:28: Analyzing likely realistic returns and the strategy’s structural weaknesses
• 15:16 – 17:45: Listener criticism highlights risk and skepticism in the strategy

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Overall Tone & Takeaway

David Jaffee’s review is direct, data-driven, and skeptical—calling out overhyped promises and emphasizing sound, realistic expectations in options trading. He insists that while LEAPS and PMCCs are popularized as a path to “easy income,” strategies like these frequently underdeliver and can introduce risks that less-experienced traders might misunderstand or overlook. David’s key message is: beware of grand promises—options trading requires nuanced risk management and realistic expectations.

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For listeners:
This episode serves both as a cautionary tale about blindly following hyped trading strategies and a practical primer on understanding the real risks and long-term returns of covered call variants.

Transcript

[A]

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[B]

My name is David Jaffe. Welcome to the wealth and Health Podcast where you'll learn valuable skills and positive habits that will improve your life. This podcast originally aired as a video on my YouTube channel at YouTube.com Best stop strategy the wealth and Health Podcast is brought to you by beststockstrategy.com we're going to check out retire by creating a ten thousand dollar a month salary with LEAPS on the spy Step by Step Guide by Money Talk with Rashad and let's see what he has to say.

[C]

What's up traders? So today I'm going to show you how you can retire with less than $170,000 by creating a salary for yourself of $120,000 per year using LEAPS.

[B]

All right, so right off the bat the probability of that is close to 0%. He's saying that you could earn 70% a year by trading LEAPS, and I believe that's bullshit. If you could earn 70% a year consistently on a base of 170,000 do, then after 30 to 40 years you'd probably be the richest person in the world. So right off the bat I automatically think that this guy is full of shit. But maybe I'm wrong.

[C]

If you're new to the channel, my name is Rashad. I am a full time options trader and I bring in multiple six figures a year from the stock market and I use the funds.

[B]

I'm my gut feeling is that he brings in multiple six figures a year from his community, not from trading. But I could be wrong from trading

[C]

options in order to pay for my entire lifestyle. Now for me, options trading has afforded me the ability to be able to retire since I was 32 years old. I'm currently 35 and I don't think I'll be retiring anytime soon as in the sense of doing nothing. However, if I wanted to, options trading has afforded me the ability to make that choice. And it's just crazy for me to think about how things change over time because nine years ago I was working at a job, making $10 an hour. Then about eight years ago, I started a business that was able to provide for me and my family. However, when the pandemic happened, I had to shut everything down and essentially my income went to zero. And with me having a wife and kids, I was like, this ain't going to work.

[B]

So it was from there that I started teaching people how they can earn 70% a year by trading options, even though that number is completely unrealistic.

[C]

Started trading options. And I remember my thought process when I first started thinking that if I could just make an extra few hundred dollars per week, that would help out a whole lot. And for me at that time was very.

[B]

All right, let's see what he says about the actual trading strategy as as opposed to telling you his backstory. So that way he can gain your trust by having him seem more relatable.

[C]

All right. If you're not familiar with spy ticker symbol spy, it is essentially just an ETF that follows the S&P 500, which is the largest five footing in video. And if we scroll the 2000.com bubble here so we can see it started about March of 2000 and then ended around March of 2003. So that was exactly three years where it trended in a downward direction. And then the second time would be during the 08 recession. And so it looks like that started around around November of 07, and then it ended March of 2009. So that was actually a little less than a year and a half. So it barely made the mark of going down for over a year. And those were the only two times within the last.

[B]

In 2017, wasn't the market flat? I think it was up very, very slightly. I remember that because I was selling very aggressive put options and I made a killing that year. But if I was going to buy call options, and I would not have

[C]

done that for years where it has trended downward. Because if we look over here from data buying in, because I want to show you a much better way to go about it. Now, if you're familiar with the channel, you know that I always compare and make the analogy of selling puts to car insurance and it's inside of it. Who can pay you every month? Well, that's where the short call comes in. Now that we have that leap, we can sell a call every single month at a higher price.

[B]

Yeah. So this strategy is almost guaranteed to underperform the market. And the reason is that by selling the call option, you're unable to participate in the upside of the leap, and you're sacrificing the upside potential. That's why every single covered call ETF dramatically underperforms the market. In fact, some of them underperform the market by about 5 or 6% every single year. You're better off simply buying a leap if you believe that the market's going to go up or you're better off just simply holding on to shares. But using a poor man's covered call is not a good strategy. Also, and this is something that he's probably not going to discuss in this video because very few people do, you could lose money on this strategy even if the underlying security goes up. And the reason for that is the short calls will have a higher short delta than your long delta from the leap. And therefore, as the underlying security goes up in value, you're actually losing more money on the short call than you're making on the long leap.

[C]

Collect income every single month. And so that short call with an expiration of more than a year out, and you could do just a year if you want to. However, with this strategy, it's best to go as far out as possible. So I'm going to go all the way down here. And it looks like they have December 2027 expirations available. So that is almost three years out. So we'll go ahead and select that. And now we need to select our strike price. Now, with this strategy, it is best to select a strike that is in the money. And that way the options premiums move more like if you just own the stock. And so what I would do is come over to the Delta column and Delta is saying that there's an 80% that would bring us down here to the now. If you're new to options, every contract is worth 100 shares, so you're only paying 12 to look at an expiration date somewhere between and 45 days. So I'll come back to the options chain here. And that's great. We found our rental property, but now we need to go out and find.

[B]

So it looks like he's buying a leap with the longest stated expiration and at a 70 Delta.

[C]

Our tenants, aka sell calls against the long call that we just bought. And we know that we want the tenants to pay us roughly every month. So now I'm going to look at an expiration date somewhere between 30 and 45 days.

[B]

Yeah, I think that's horrible because that trade is probably going to end up getting challenged almost 50% of the time.

[C]

So I'll come back to the options. Now let's scroll up and this is perfect. I found an expiration that's about 36 days out. So I'm going to click on it, then I'll scroll down some. Now here I want to pick a delta of 0.40. So this is saying that I have roughly a 40% chance of that strike being in the money by the expiration date. That is 36 days out from now. And so if we come over here, we scroll down, it looks like this $597.50 strike would fit that bill perfectly. And for this, we would receive anywhere between $7.71 and $7.82. And again, let's go right down the middle, which would put us at about $7.75. So we would receive 775. And that is the Bollinger band and the stochastic. Now, if you're not familiar, slightly popped out.

[B]

Now he's talking about using technical analysis here.

[C]

Came back. It is definite call and buying a call. I would just wait until the stochastic is showing an upward direct look at. It's a stochastic. And the stochastic just aims to that. But let's get back to the numbers. All right, so we bought our rental property, aka our Leap, and for that we paid $12,800 and we get to own this Leap for almost three years. But then once we got the property, we found a tenant, aka our short calls, and for this we were paid $775 for the month. Now, we did say that we wanted to bring in $120,000 in contracts, aka the 13 rental, and the 13 tenants, aka the 13 short calls, would pay us $10,075 per month.

[B]

First off, that doesn't even make sense because he's saying that he's going to sell it between 30 and 45 days. That means you're going to have less than 12 cycles where you're going to be able to collect the $775. Also, there's going to be many times where that short call is going to end up showing you a loss and then you're going to have to roll out that position. And then if you get caught in a raging bull market, you're basically going to be holding on to only downside risk because your upside potential is going to be capped. And yeah, I understand that you might be able to roll it a little bit, but when a short call becomes deep in the money, it is very difficult for you to roll the short call higher. So for all intents and purposes, you're going to be left with a situation where your leaps are going to be capped out at max profit and all your buying power is going to be used up. So you're not going to be able to make any, any trades. You're essentially going to be stuck and handcuffed in a trade that's using up all of your buying power, that has no more upside potential. You're going to be forced to roll those call options for a few dollars a month. And then if the market collapses, your long calls are going to end up showing you a loss. And think about it rationally. This guy is telling you that you can make 70% a year by simply buying leaps and selling cover calls against it. If the S and p averages around 12 to 13% a year, do you really think that you five times that amount by simply buying calls and then selling cover calls against it, which is going to end up capping your upside? His entire pitch in this video does not make sense.

[C]

And you know, I actually own a few rental properties.

[B]

Yep. So there he is pitching the community, which I believe is his main way of generating profits from the stock market. But I could be wrong.

[C]

Even when you're not from these expiration. So now we've created our own salary from these leaps. But just like with real estate now, what if during that, imagine being able to take that trip you've always been dreaming of knowing that your money is still working for you there.

[B]

He's using visualization about what's possible, how you can be your own boss and you can make your own money and pay for your vacation while you're on vacation. And all you got to do is join his community.

[C]

I'll see you in the community. Okay, so now we've created our own salary from these.

[B]

Right. But he's using that word salary, which doesn't make sense. It's my understanding that salary means that you're paid a specific amount over a course of time. But here, the amount that you're paid is always going to vary. Also, if that call option is going to be in the money, you're barely going to make any money. In fact, you're likely only going to be carrying risk because as mentioned earlier, all your buying power is going to be used up. If we use Rashad's example, you're going to have to roll those short calls for just a few dollars month while you're also carrying significant downside risk if the market decides to Correct.

[C]

But just like with real estate now, what if during that month spike $550 spy goes up a whole lot and blows past your short call strike. Well, let's take a look. So now I'm back in the options chain. So let's go ahead and re enter the trade. So for our long call we selected a December 2027 expiration. Now scroll down. And we selected the strike of $550. That's perfect. So we have that and now we need to go and resele call strike. And so what I would do is come over to the delta column and you can see these numbers. Here are the deltas and that there's an 80% point 80 and let's pick a delta of 0.70 and that will bring us down here to the 550 strike. And it looks like the bidding after the President Trump was elected again as of course you could just rebuy it which was $597.50. So we have that and now we need to go and reselect our short call strike. And for that we selected the expiration date that was 36 days out from now scroll. And we had the strike of $597.50. So I'll click that as well. And now we just need to analyze this trade. So I'll go and right click it, hit analyze trade. So here we're at the analyze tab. Now what I want you to pay attention to is the number that comes up with this blue number down here because on this x axis here is the price.

[B]

I'm confused. He doesn't even tell you what he's going to do once the short call becomes in the money. All he's doing is going into the analyze tab and showing you what the numbers are. But the numbers are very simple. He's selling a 40 Delta which in a bull market is probably going to end up getting challenged around 45 to 50% of the time. So I want to know exactly what to do when that short call gets challenged. And you're essentially holding a position that's using up all your buying power where the short call is in the money and the short delta is higher than the long delta, which means that you're going to lose money as the underlying security increases in price. And I want to see him roll the short call that's in the money where you're also acting as a bag hold. If the market corrects, then you still participate and have substantial downside risk while your upside potential is capped.

[C]

Spy. And then on this Y axis is how much you would make or lose in the trade. And so if we look here, we can see the peak. Here is our short call strike, which was $597.

[B]

Right. But show an example when you have an in the money call option that's pretty deep in the money, and then show your audience what exactly you're going to do in order to roll that position and, and how much money you're going to collect. I would estimate that you're probably going to make around 8 to 10% a year using this strategy. Not 70% a year, 50 cents.

[C]

And you can see that if SPY were to be exactly at that price on the expiration date at the bottom, you would make $478 off that trade. Now, you would be forced to sell your leap. But of course, you could just rebuy another one.

[B]

I don't think he understands this trade himself. He's showing the analyze tab, but he's not walking you through exactly what you need to do and what the risks are. And ask him very simply, if I follow this example, does that mean that I will be the richest person in the world after 30 or 40 years? Because that's what would happen if you took around $170,000 and made 70% every single year. And then also ask him why every single covered call ETF dramatically underperforms simple buy and hold. And from his explanation of looking at the Analyze tab, where he's not telling you what he would do if the short call was in the money, I don't think he actually understands this trade himself.

[C]

The course of this month, you would be fine all the way until spy were to hit 615. And if spy were to keep going up, you could potentially start losing money. However, that right there would be about a 5% move in the span of a month. And that has very, very, very rarely happened. The market average is about a 10% return for the entire year. So.

[B]

Right. So the market average is 10 a year. And he's telling you that you can make 70%.

[C]

Now, it did just recently happen in November after President Trump was elected. Then it would only take us 16.

[B]

So just to be clear, I don't believe he showed you the actual trade that you would need to make if the short call was in the money.

[C]

Okay, so now we've created our own salary from these leaps, but just like with real estate now, what if during that month, SPY goes up a whole lot and blows past your short call strike? Well, let's take a look.

[B]

So what's the answer to that question? He didn't tell you exactly what you need to do. He didn't say okay, if the short call is in the money, then you're going to have to roll it to this position. And here's an example. No, I mean there's a reason why every single cover call ETF dramatically underperforms the market and doesn't earn anywhere close to 70%. And this is why, in my opinion the PMCC is a horrible trading strategy and not something that I would recommend. If you have any questions or if you agree or disagree, then leave a comment below. Let me know your thoughts on money Talk with Rashad and I appreciate your attention. Also, someone basically said the exact same thing that I did in this comment. They said I like the concept but the risk appears greater than your claim. You said the market rarely goes up more than 5% a month. I look back in the spy experiences about three months a year of gains 5% or higher, sometimes almost as high as 10% in a month. It would be nice to see this strategy back tested and then see the results. Also, the strike price of 597.5 is about 1.35% away from the current price of 589.49. You are selling options only 1.35% away, so it seems the risk of it going against you is pretty high. That 0.4 delta in 36 days seems risky when the market currently averaged more than 1.35% move monthly. How do you compensate for the losses over the last four years? Twice there were eight months with returns over 1.35% in a month. One year there was seven months and once there was only four months. Just over 56% of the time you would have had returns greater than the 1.35% then someone else wrote. This strategy has risk on both sides. Upside, you lose more on the call you sold than on what you bought, so your salary won't work. But the worst is the downside where you can lose 10k if the market tanks. I wouldn't follow this strategy and he's 100% right where the delta on the short call is going to be greater than the positive delta on the long call so you can lose money as spy increases in price. Visit beststockstrategy.com and submit your email address to receive invaluable free training. Please give this podcast a positive reading and review. If you have any questions, visit beststockstrategy.com and send me a message.

[C]

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[A]

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[C]

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