Penn State University - Smeal College of Business
PSU search
Student Exchange Smeal site map Contact us Accounting faculty directory

Steven Huddart picture
 
Should I exercise my stock options?
 
 
Research
 
Case Studies
 
Courses
 
 
Stock compensation glossary
 
Compensation links
 
Securities law links
 
Tax links
 
 
Office hours and location
 
Facts About The School
 
Home | Previous | Next | Huddart Site Map

LEAPS


Description

Long-term Equity AnticiPation Securities (LEAPS) are put and call options on underlying stocks that have expirations of at least 9 months and as long as three years from the time of listing. When an option's expiration is less than 9 months away, the option trades under a different Ticker symbol. Thus, on stocks for which LEAPS are available, conventional options with expirations of up to eight months also are traded.

Exercise is American: LEAPS may be exercised on any business day prior to the expiration date.

Trading Unit

The minimum trade size is one option contract. Each contract represents 100 shares of the underlying stock.

Expiration date

The Saturday following the third Friday of the expiration month.

Exercise price intervals

Initial exercise (strike) prices are set relative to the value of the underlying stock. Initial strikes are set approximately at the stock price and about 25% above and 20% below the value of the stock.

Minimum margin for uncovered writers

Premium plus 20% of the value of the underlying stock, reduced by any out-of-the-money amount to a minimum of premium plus 10% of the value of the stock.


Steven Huddart
Smeal College of Business, Penn State University, University Park, PA 16802-3603 USA
(814) 863-0048
huddart@psu.edu
vCard
Home | Previous | Next | Huddart Site Map

http://personal.psu.edu/sjh11/OptionGlossary/LEAPS.shtml
was last updated on Tue, Aug 21, 2018.
Today is Fri, Nov 15, 2019.

Unless otherwise noted, all material is:
Copyright ©1995-2018 Steven Huddart. All rights reserved.