Unlike lawmakers who restrict their investments to index mutual funds or plain vanilla equities, Paul Pelosi regularly deploys Long-Term Equity Anticipation Securities (LEAPS)—options contracts with expiration dates extending twelve to twenty-four months into the future.
1. In-The-Money (ITM) Strike Selection
Rather than purchasing speculative out-of-the-money (OTM) lottery tickets, disclosed filings demonstrate a disciplined preference for deep in-the-money strikes. Deep ITM calls behave similarly to synthetic equity with low time decay (theta) and high correlation to underlying share price movements (delta > 0.85).
2. Capital Efficiency and Risk Management
LEAPS enable the household to control substantial equity exposure for a fraction of the upfront capital required to purchase underlying shares outright, while capping absolute risk to the initial premium paid.