Len Yates

LEAPs are an attractive alternative to stock ownership. Not only do they have a better risk/reward profile, inexpensive LEAPs are easy to find and thus come with an inherent edge.
LEAP stands for Long-term Equity Anticipation Securities. As far as I'm concerned, LEAPs are just long-term options -- longer term than the standard listed options. The only other thing special about them is that the exchanges consider them securities and allow brokerages to lend you up to 25% of their value. Not all brokerages honor this, however, and I wouldn't recommend taking advantage even if yours will.
LEAPs are available with expirations one to three years out (currently January 2008 and January 2009) on hundreds of the most popular stocks and many indexes. Once a LEAP has only 9 months of life remaining, it converts into a standard listed option.
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