Why I Bought Microsoft LEAPS Instead of Buying More Shares

By Harsh Shah · Updated 2026-10-18

Disclaimer: This article is for educational purposes only and should not be considered financial advice. Options involve significant risk and are not suitable for every investor. Always do your own research before making any investment decisions.

If you’ve been following me for a while, you know I’m a long-term investor.

I don’t buy options to chase quick profits or gamble on what a stock might do next week.

I use them selectively when I have strong conviction in a business and believe they fit my investment strategy.

Recently, I purchased 2 Microsoft (MSFT) December 15, 2028 $250 Call LEAPS.

A few people asked me why I didn’t simply buy more Microsoft shares instead.

The answer comes down to one thing:

Capital efficiency.

Let’s break it down.

First, What Is a Call Option?

A call option gives you the right, but not the obligation, to buy a stock at a predetermined price (called the strike price) before a certain date.

One option contract represents 100 shares.

So:

1 contract = Exposure to 100 shares
2 contracts = Exposure to 200 shares

My contracts have:

Strike Price: $250
Expiration: December 15, 2028

Unlike buying shares, I don’t actually own Microsoft.

Instead, I own contracts whose value depends on Microsoft’s stock price.

What Are LEAPS?

LEAPS are simply long-term options.

Instead of expiring in a few days or weeks, they expire years into the future.

That gives my investment thesis time to play out.

I personally prefer LEAPS over short-term options because I’m investing based on where I believe Microsoft can be over the next few years — not next Friday.

My Position

Here’s exactly what I bought.

2 Microsoft December 15, 2028 $250 Call LEAPS
Average Cost: $168.36
Cost per Contract: $16,836
Total Investment: $33,672

Those two contracts give me exposure to 200 Microsoft shares.

Why Didn’t I Buy More Microsoft Shares?

Microsoft is currently trading around $377 per share.

I had two choices.

Option 1 — Buy Shares

With around $37,700, I could buy:
100 Microsoft shares

Option 2 — Buy LEAPS

Instead, I invested $33,672 and bought:

2 LEAPS

That gives me exposure to:

200 Microsoft shares

Here’s the comparison.

Option 2 — Buy LEAPS — Why I Bought Microsoft LEAPS Instead of Buying More Shares

This is exactly why I chose LEAPS.

For roughly the same amount of money, I was able to gain exposure to twice as many Microsoft shares.

That doesn’t mean LEAPS are better.

It simply means they’re a more capital-efficient tool if you understand the risks.

My Break-Even Price

The strike price isn’t where I break even.

I also paid a premium.

My numbers are:

Strike Price: $250
Premium Paid: $168.36

So my break-even price at expiration is:

$418.36

If Microsoft finishes above $418.36 on December 15, 2028, my LEAPS are profitable if I hold them until expiration.

Let’s Compare the Outcomes

Assuming:

Microsoft today: $377
Buying 100 shares: $37,700
Buying 2 LEAPS: $33,672
Strike Price: $250
Break-even at expiration: $418.36

Let’s Compare the Outcomes — Why I Bought Microsoft LEAPS Instead of Buying More Shares

The Risks

LEAPS aren’t free leverage.

They come with trade-offs.

You don’t receive dividends.

You don’t have voting rights.

They lose value as time passes.

And unlike shares, they expire.

If my investment thesis doesn’t play out before December 2028, I can lose my entire investment.

That’s why I only use LEAPS for companies where I have strong long-term conviction.

One Important Thing to Remember

Everything I’ve discussed above assumes I hold these contracts until expiration.

I don’t have to.

LEAPS trade every day.

If Microsoft performs well over the next year or two, I can sell my contracts before expiration.

In fact, many investors never hold LEAPS until the final day.

Why I Chose LEAPS now

Microsoft has pulled back nearly 40% from its all-time high and is now trading near a key long-term support zone.

Even more interesting, the stock is only about 10% higher than it was back in 2021. In other words, I’m getting the opportunity to buy one of the world’s best companies at a price that’s very close to where it traded nearly five years ago.

Why I Chose LEAPS now — Why I Bought Microsoft LEAPS Instead of Buying More Shares — Daily Chart

For me, this decision wasn’t about taking more risk.

It was about using my capital more efficiently.

With roughly the same amount of money, I could either:

Buy 100 Microsoft shares, or
Buy 2 LEAPS with exposure to 200 shares.

I chose the second option because I have long-term conviction in Microsoft and wanted greater upside exposure without committing more than $75,000 to buy 200 shares outright.

Of course, I fully understand the trade-off.

If Microsoft performs well over the next few years, the LEAPS have the potential to outperform buying 100 shares.

If I’m wrong, I can lose my entire premium (but this can me managed through the life of the option).

I accepted that risk before I entered the trade.

Final Thoughts

LEAPS aren’t for everyone.

They’re not better than buying shares.

They’re simply another investing tool.

The key isn’t asking, “Should I buy LEAPS?”

The better question is:

“Does this strategy fit my investment thesis and my risk tolerance?”

For me, the answer was yes.

I believe Microsoft is one of the highest-quality businesses in the world, and LEAPS allowed me to express that conviction in a way that fit my portfolio and capital allocation strategy.

Whether this turns out to be the better decision, only time will tell.

But every investment starts with the same thing:

Have conviction in the business first. Then choose the investment vehicle that best fits your goals.