Options Basics
What is LEAPS?
Long-term options with expiration dates over one year out.
📖 Complete Definition
LEAPS (Long-Term Equity Anticipation Securities) are option contracts with expiration dates more than one year away. They offer a way to take long-term directional positions with less capital than buying stock. LEAPS have lower theta decay and can serve as stock substitutes. Delta on deep ITM LEAPS approaches 1.0.
💡 Examples
- →Buying a January 2027 LEAP call instead of 100 shares of stock
- →Deep ITM LEAPS can control shares for 20-30% of the stock cost
❓ Frequently Asked Questions
When should I use LEAPS instead of stock?
LEAPS offer leverage with less capital at risk. Use them when you have a long-term bullish view but want to limit downside or free up capital for other investments.
🔗 Related Terms
Put Your Knowledge to Practice
Use our free options tools to analyze trades, calculate Greeks, and visualize profit/loss scenarios.