Options Quick Facts - LEAPS®

What are equity LEAPS®?

Equity LEAPS, or Long-term Equity AnticiPation Securities, are American-style, long-term put and call contracts on common stock or ADRs. These long-term options provide the holder the right to purchase, in the case of a call, or sell, in the case of a put, a specified number of stock shares at a pre-determined price up to the expiration date of the option, which can be up to three years in the future.



What are the trading hours for equity LEAPS Options?

As with regular equity options, trading hours for equity LEAPS are Monday through Friday, 8:30 a.m. to 3:00 p.m. Central Time.



What can equity LEAPS do for you?

LEAPS calls and puts can provide an investor with a long-term view (up to three years) on an underlying stock the opportunity to participate in the up or downward movement - there is more time for the underlying stock to move profitably. LEAPS puts can provide long-term insurance for underlying stockowners in the event of a substantial decline in their stocks over time



Can I purchase LEAPS directly from the Chicago Board Options Exchange?

No. LEAPS must be purchased like all other option securities, via a broker dealer or online trading network.



What determines if LEAPS are available on a particular stock?

LEAPS trade on a select list of optionable stocks. The Chicago Board Options Exchange regularly reviews its options products and periodically lists new equity LEAPS. An updated CBOE LEAPS list can be obtained by visiting the Symbol Directory located within this site.



Are there both LEAPS calls and LEAPS puts?

Yes. If there are LEAPS listed for any class of options at the CBOE there will be both LEAPS calls and LEAPS puts.



When do equity LEAPS expire?

Currently all equity LEAPS contracts expire in January of their expiration year. Like regular, shorter-term equity options, equity LEAPS expire on the third Saturday of the expiration month, a day historically reserved for brokerage firms and The Options Clearing Corporation to confirm customers' positions. Equity LEAPS, however, expiring on or after February 15, 2013 will generally have an expiration date of the third Friday of the expiration month.



When is the last day to trade or exercise an equity LEAPS contract?

Like regular, shorter-term equity options, equity LEAPS expire on the third Saturday of the expiration month, a day historically reserved for brokerage firms and The Options Clearing Corporation to confirm customers' positions. Equity LEAPS, however, expiring on or after February 15, 2013 will generally have an expiration date of the third Friday of the expiration month. The day expiring equity LEAPS options last trade is the third Friday of the month. This is also generally the last day an investor may notify his brokerage firm of his intent to exercise an expiring equity LEAPS call or put. If this third Friday happens to be an exchange holiday, then the last day of trading for expiring equity LEAPS is the day before, or the third Thursday of the month. Check with your brokerage firm about its procedures and deadlines for instruction to exercise any equity options.



When can equity LEAPS be exercised?

Like regular equity options, equity LEAPS are American-style contracts. This means that holders have the right to exercise the options at any time prior to their expiration.



How do I know when the next January expiring LEAPS will be listed?

All new January expiring equity LEAPS are initially listed Monday of expiration in either September, October, or November each year. The month that the LEAP is initially listed in is dependent upon the quarterly cycle of the option. Cycle 1 options January expiring LEAPS are listed the Monday of expiration in September, cycle 2 are listed the Monday of expiration in October, and cycle 3 are listed the Monday of expiration in November.



What is LEAPS "rollover"?

LEAPS "rollover" refers to the process of LEAPS conversion and the listing of new LEAPS contracts.



If an exchange offers LEAPS on an equity option, how would I distinguish between a regular January option and a January LEAP?

Just as a regular option has its own unique option symbols, equity LEAPS also have unique "root" symbols that allow investors to distinguish between the variety of options currently available on a particular stock. LEAPS symbols for contracts listed at CBOE are listed in the LEAPS Symbol Directory on this Website. As well, in most option quote chains that display all calls and puts traded on a given underlying stock the expiration year will be designated. Such chains are provided for free (and delayed) on this Website in the Quotes area.



Are LEAPS traded on underlying indexes?

Yes, index LEAPS are traded on specific underlying indexes. For a list of index LEAPS listed and traded at CBOE, as well as their product specifications, please refer to the Index Option discussion in the Products area of this Website.