InvestorWords.com

Long-Term Equity Anticipation Securities 

LEAPS. Long-term stock options or index options, with expiration dates up to three years away. LEAPs are very similar to standard options except for the fact that they expire much further in the future. They can be safer than traditional options because it is somewhat easier to predict stock movement over longer periods. Like options, they allow an investor to lock in a fixed price for the underlying security. Therefore, like options, they can be effective for both leverage and insurance purposes. Expiration generally occurs 36 months after purchase, and LEAPs are American style, so they can be exercised at any time before expiration. Strike prices usually range around 25% above or below the price of the underlying stock when the LEAP is first offered.

This content can be found on the following page:

Copyright©1997-2008 by InvestorWords.com. ALL RIGHTS RESERVED.

Reproduction of all or part of this glossary and/or this page, in any format, without written consent is prohibited. If you have questions about this dictionary please feel free to contact us feedback@investorguide.com

Copy and paste this HTML in your website to link to this page    <a href="http://www.investorwords.com/2889/Long_Term_Equity_Anticipation_Securities.html">Long-Term Equity Anticipation Securities</a>