B. Do a stated income or no doc loan – These types of loans are done all of time, where you need no proof of income, you only state on a form what your income is, and you do not need to verify it. This can help if you are self employed and want to state your income as it is and not worry about having lender average out your income from last two years instead. Make sure you are accurate in stating your income, because lender may be able to obtain past taxes from IRS to confirm it. When you do a stated income loan, this will put more emphasis on your down payment or credit score. So, you will usually need one of these factors to be strong if you want to go this route. Most of time when you do a stated income or no doc loan, you will be charged a slightly higher interest rate because of extra risk lenders carries.

C. Put together a profit & loss statement stating accurately stating your profits and expenses from last two years. This can be a time consuming project, but it can sometimes be used as income verification for a lender. It is more usable if you have had it signed or verified by your accountant.

There are many ways that lenders can work with you if you are self employed. There are many programs available to help you and if you have a down payment or decent credit, you are almost guaranteed to be able to get approved somewhere.

By doing this you will effectively be getting cash back on your investment every single month that you hold your LEAPs.

Over long-term this will not only offset time-decay of your LEAPs, but also offer you some downside protection, should stock go in opposite direction that you want it to.

This is known as a Calendar Spread and is a much more conservative way of speculating with LEAPs.

Important: If stock rises above your sold strike price for your current month Calls or below your sold strike price for your current month Puts, then you risk being assigned/exercised.

You should never allow this to occur because moment you are assigned you will lose whatever time value is left on your LEAPs.

It is far better to close out trade for a profit by buying back sold option and selling your LEAPs for an overall profit or simply holding your LEAPs and then writing (out of money) options against them for next month.

Click here for more information about LEAP option trading.

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