Equity LEAPS® Product Specifications
Generally, 100 shares of common stock or American Depository Receipts ("ADRs") of companies that are listed on securities exchanges or trade over-the-counter.
Equity LEAPS are long-dated options on common stock or ADRs of companies that are listed on securities exchanges or trade over-the-counter. Equity LEAPS expire in approximately two to three years from the date of initial listing.
Strike Price Intervals:
2.5 points when the strike price is between $5 and $25, 5 points when the strike price is between $25 and $200, and 10 points when the strike price is over $200. Strikes are adjusted for splits, re-capitalizations, etc.
Strike (Exercise) Prices:
In-, at- and out-of-the-money strike prices are initially listed. New series are generally added once a year and after substantial market moves.
Stated in points and fractions. One point equals $100. Minimum tick for series trading below 3 is .05 and for all other series, .10.
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.
May be up to 39 months from the date of initial listing, January expiration only.
American - Equity LEAPS generally may be exercised on any business day before the expiration date.
Settlement of Option Exercise:
Exercise notices properly tendered on any business day will result in delivery of the underlying stock on the third business day following exercise.
Position and Exercise Limits:
Limits vary according to the number of outstanding shares and past six-month trading volume of the underlying security. The largest in capitalization and most frequently traded stocks have an option position limit of 75,000 contracts (with adjustments for splits, re-capitalizations, etc.) on the same side of the market; smaller capitalization stocks have position limits of 60,000, 31,500, 22,500 or 13,500 contracts (with adjustments for splits, re-capitalizations, etc.) on the same side of the market. The number of contracts on the same side of the market that may be exercised within any five consecutive business days is equal to the position limit. Equity option positions must be aggregated with equity LEAPS positions on the same underlying for position and exercise limit purposes. Exemptions may be available for certain qualified hedging strategies.
Please refer to Exchange Rule 4.13 for information pertaining to reporting requirements for positions in excess of 200 contracts.
For purchases of puts or calls with more than 9 months until expiration, deposit / maintain 75% of the total cost / option current market value. When time to expiration reaches 9 months, the option no longer has value for margin purposes. Purchases of puts or calls with 9 months or less until expiration must be paid for in full.
Writers of uncovered puts or calls must deposit / maintain 100% of the option proceeds* plus 20% of the aggregate contract value (current equity price x $100) minus the amount by which the option is out-of-the-money, if any, subject to a minimum for calls of option proceeds* plus 10% of the aggregate contract value and a minimum for puts of option proceeds* plus 10% of the aggregate exercise price amount. (*For calculating maintenance margin, use option current market value instead of total cost or option proceeds.) Additional margin may be required pursuant to Exchange Rule 12.10.
Last Trading Day:
Trading in equity LEAPS will ordinarily cease on the business day (usually a Friday) preceding the expiration date.
8:30 a.m. - 3:00 p.m. Central Time (Chicago time).