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 Cboe 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 Cboe 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. As with regular, shorter-term equity options, the expiration date is the Saturday immediately following the third Friday of the expiration month until February 15, 2015. On and after February 15, 2015, the expiration date will be the third Friday of the expiration month (January).

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, 2015 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.

What is LEAPS conversion?

LEAPS contracts on a given underlying stock are converted to regular, shorter-term equity option contracts as their expiration approaches. The timing of this depends on the quarterly cycle assigned to options of the same class:

  • January cycle - after the May expiration immediately preceding expiration January
  • February cycle - after the June expiration immediately preceding expiration January
  • March cycle - after the July expiration immediately preceding expiration January

This conversion has no effect on the converted LEAPS' contract terms or premiums. However, new option symbols and codes are assigned as a matter of convenience in allowing OCC, the exchanges and brokerage firms to distinguish new LEAPS contracts, listed shortly after conversion, from those older ones approaching expiration.

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.