Long-term Equity AnticiPation Securities (LEAPS) at CBOE

Long-term Equity AnticiPation Securities™ (LEAPS®) are long-term option contracts that allow investors to establish positions that can be maintained for a period of up to three years. CBOE lists LEAPS on Equity and Index products.

The development and introduction of LEAPS by CBOE in 1990 added a whole new range of options possibilities, many suited for conservative stock investors. Current options investors are using LEAPS, as are stock investors, because of the similarities between LEAPS and shares of stock, and the more conservative nature afforded to LEAPS by their long-term expirations.

Benefits of Equity and Index LEAPS:

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

Ask the Institute LEAPS Q&A: