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StockCram is not a broker-dealer, investment adviser, or financial institution. All content is for educational and informational purposes only and should not be construed as personalized investment advice. Consult a qualified financial professional before making investment decisions. Past performance does not guarantee future results.Simple Definition
Long-term options with expirations over 1 year. Stands for Long-term Equity Anticipation Securities.
Why It Matters
LEAPS give you time on your side. Instead of racing against theta decay with 30-day options, you have 1-3 years for your thesis to play out. Deep ITM LEAPS can act as a stock replacement - controlling 100 shares for a fraction of the cost with much less daily time decay.
Key Points
- LEAPS have minimal daily theta decay - time works more slowly against you
- Popular for 'stock replacement' strategies using deep ITM calls
- Higher upfront cost but lower risk of total loss from time decay alone
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Strike Price and Expiration
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Related Terms
Common Questions
Long-term options with expirations over 1 year. Stands for Long-term Equity Anticipation Securities. LEAPS give you time on your side. Instead of racing against theta decay with 30-day options, you have 1-3 years for your thesis to play out.
LEAPS give you time on your side. Instead of racing against theta decay with 30-day options, you have 1-3 years for your thesis to play out. Deep ITM LEAPS can act as a stock replacement - controlling 100 shares for a fraction of the cost with much less daily time decay.
LEAPS have minimal daily theta decay - time works more slowly against you
Popular for 'stock replacement' strategies using deep ITM calls
Higher upfront cost but lower risk of total loss from time decay alone