CBOE Index Workbench

Long-Term Equity Anticipation Securities (LEAPS) are long-term options available on over 300 equities and 11 indexes. LEAPS provide investors with a longer-term view of the market as a whole or on an individual stock. As with traditional short-term options, LEAPS are available in two types, calls and puts.

In August 2001 open interest for CBOE equity LEAPS was 10,283,221 contracts, and for CBOE S&P 500 LEAPS was 1,172,098 contracts.

Equity LEAPS Benefits

Equity LEAPS calls can provide long-term stock market investors an opportunity to benefit from the growth of large-capitalization companies without having to make outright stock purchases.

Equity LEAPS puts can provide a hedge for stock investors against substantial declines in underlying equities.

Current equity options users may also find LEAPS appealing if they desire to take a longer term position of up to three years in some of the same options they currently trade.

Index LEAPS Benefits

Index LEAPS let you trade, hedge or invest in the "entire" stock market or select industry sectors for a time that can be measured in years.

Index options let you take a bullish or bearish position on the entire market. Index options let you hedge your investments against adverse market moves.

Index LEAPS let you do all this over a longer time period.

Please click here for a LEAPS brochure.

Options involve risk and are not suitable for all investors. Prior to buying or selling options, a person must receive a copy of Characteristics and Risks of Standardized Options, which is available from The Options Clearing Corporation, One North Wacker Dr., Suite 500, Chicago, IL 60606, or by calling 1-888-OPTIONS.

Please note that futures on the CBOE Volatility Index® (VIX®) were introduced in 2004 after the methodology for VIX was changed; please visit www.cboe.com/vix for volatility updates that might not be reflected on this CD-ROM.

This discussion is designed to assist individuals in learning how options work and in understanding various options strategies. This discussion is for educational purposes only and is not intended to provide investment advice. Commissions, taxes and transaction costs generally are not included in the strategy discussions, but can affect final outcome and should be considered. Please contact a tax advisor for the tax implications involved in these strategies.
This discussion has been prepared solely for informational purposes, based upon information generally available to the public from sources believed to be reliable, but no representation or warranty is given with respect to its accuracy or completeness. No statement herein should be construed as a recommendation to buy or sell a security or to provide investment advice. Any profit/loss diagrams refer only to approximate results at expiration. Past performance is no guarantee of future results.

S&P 100® and S&P 500® are registered trademarks of the McGraw-Hill Companies, Inc., and are licensed for use by the Chicago Board Options Exchange, Inc. ("CBOE"). The Russell 2000® Index is a registered trademark of Frank Russell Company. The Nasdaq 100® is a registered mark of The Nasdaq Stock Market, Inc. "Dow Jones SM", "Dow Jones Industrial AverageSM", "Dow Jones Transportation AverageSM," and "Dow Jones Utility AverageSM" are service marks of Dow Jones & Company, Inc. and have been licensed for certain purposes by the CBOE. iSharesSM is a servicemark of Barclays Global Investors. The Goldman Sachs Technology Indexes are the property of Goldman, Sachs & Co. and have been licensed to the CBOE in connection with the trading of options based upon the indexes. Dow Jones & Co., The Nasdaq Stock Market, Goldman Sachs, and McGraw-Hill make no warranties and bear no liability in regard to the trading of index options.VIX®, CBOE Volatility Index® LEAPS®, FLEX®, FLexible EXchange® and OEX® are registered trademarks and Long-term Equity AnticiPation SecuritiesTM and SPXTM are trademarks of the Chicago Board Options Exchange, Inc.

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