How LEAPS® Work
LEAPS® are simply long-term options that expire at dates up to 2 years and 8 months in the future, as opposed to shorter-dated options that expire within one year.
LEAPS® grant the buyer the right to buy, in the case of a call, or sell, in the case of a put, shares of a stock at a predetermined price on or before a given date. Equity LEAPS® are American-style options, and therefore may be exercised and settled in stock prior to the expiration date. The expiration date for Equity LEAPS® is the Saturday following the third Friday of the expiration month.
LEAPS® are quoted and traded just like any other exchange listed option. In fact, many of the features of LEAPS® are the same for shorter-term options:
- Number of shares covered by the contract (100)
- Exercise and assignment procedures
- Trading procedures
- Margin and commission costs
However, LEAPS® differ from shorter-term options in several ways including availability, pricing, time erosion vs. delta effect, symbols and strategies.
 |
Confused? Have a question? If you're having trouble grasping a concept or if this page doesn't answer a question, feel free to call 1-888-OPTIONS (between 7:30 a.m. - 5 p.m. CT), or email options@theocc.com to ask your question. You may also visit our Help Center for more information. |