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Long-Term Equity Anticipation Securities

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Long-Term Equity Anticipation Securities
Stock options with expiration of two to three years following issue. Most stock options expire nine months after issue; an advantage to LEAPS is the fact that there is a longer period of time for a desired price movement to take place, maximizing the possibility of profit. However, LEAPS are more expensive than other stock options.

long-term equity anticipation securities (LEAPS)
Options that carry expiration dates of up to two years.

Long-term equity anticipation securities (LEAPS). These long-term options on stocks have expiration dates of up to three years rather than the shorter terms of most stock options, which are never longer than nine months.

The benefit of LEAPS, from an investor's perspective, is that there's more time for the price movement you anticipate to occur.

However, LEAPS are available on fewer underlying stocks than standard options, and they are generally more expensive than the shorter term options on the same security.



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The Exchange will list options and long-term equity anticipation securities on the Dow Jones Industrial Average (DJX), Dow Jones Transportation Average (DTX) and Dow Jones Utility Average (DUX).
CINCINNATI -- Earlier this week, we discussed the pros and cons of trading Long-term Equity AnticiPation Securities, otherwise known as LEAPS, in the latest edition of Options 101.
CINCINNATI -- In yesterday's edition of Options 101, we analyzed a happy medium between aggressive, short-term options trading and traditional stock buying: Long-term Equity AnticiPation Securities, more commonly referred to as LEAPS.
 
 
 
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