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Long-Term Equity Anticipation Securities - or LEAPS - are call or put options that can be purchased for extended periods of time, some as much as 30 months into the future.

LEAPS offer the ability to invest in quality stocks with less capital at risk.

Additional Comments:

They are an excellent means of controlling an equity for up to 2 1/2 years and not paying for the high price of stock ownership. LEAPS differ from  egular options because of the amount of time they hold.

The Delta of LEAPS will not change as fast as shorter-dated options because of the time. Any increase in stock price will not affect the LEAPS price as much as shorter-dated options because of a lower gamma.

Think of LEAPS as investment instruments. As an investing tool, it may make sense to buy LEAPS on quality stocks during bullish markets. As a stock goes up, the LEAPS increase in value.

Related Terms:

Rho is the measure of the sensitivity of the option to changes in interest rates.When interest ...

The magnitude of price (or yield) changes over a predefined period of time. The amount by ...

An option is a type of derivative - its value is derived from an underlying asset, ...

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