LEAPS - Long Term Options
LEAPS option is an options contract that expires more
than nine months in advance. As a rule LEAPS option contract can last as
long as two years. Normal options tend to last no longer than nine
months.
LEAPS options trading is the only way, to make a long-term
option investment. An options trader may trade them like normal options but
they allow investors to benefit from the appreciation of equities while
placing a lot less money at risk than is required to purchase stock.
Several LEAPS options trading strategies may be used:
- Buying LEAPS
call options to anticipate a rally (advance in the underlying stock).
- Buying LEAPS
calls as a stock alternative.
- Buying LEAPS
put options to anticipate market drop (decline in the underlying stock).
- Buying LEAPS
bull call spreads in anticipation of a moderately rising market
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