LEAPS® are simply long-term options that expire up to two years and eight 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. Therefore, they may be exercised and settled in stock prior to expiration. The expiration date for equity LEAPS® is the Saturday following the third Friday of the expiration month, which is typically in January.
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
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Content licensed from the Options Industry Council is intended to educate investors about U.S. exchange-listed options issued by The Options Clearing Corporation, and shall not be construed as furnishing investment advice or being a recommendation, solicitation or offer to buy or sell ant option or any other security. Options involve risk and are not suitable for all investors