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| Advanced Options Concepts: LEAPs |
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Long-term Equity Anticipation Products (LEAPS) are options that don't expire for at least 9 months and can have expiration 2
or 3 years out. Once an option's expiration gets closer than 9 months, they become plain options again with an entirely new
ticker symbol. Be this as it may, LEAPS are in every way an option. Their expirations are a long way off and that makes them
prime candidates for long-term plays and secure bets for shorter-term trades.
For traders with a traditional buy and hold
orientation, options usually carry with them the stigma of being short-term trading tools with tax consequences. LEAPS, by the
very nature of their long-term expiration dates, help to overcome this stigma. It isn't unusual for LEAPS traders to hold a
position for more than a year. Plus, LEAPS have the added benefit of giving a trader significantly more time to be right about
a market move.
For more information on learning how to make money with options, go to the Optionetics.com full site! We empower investors through knowledge. |