Long Term Equity Anticipation Securities (LEAPS®)
LEAPS® are American-style options on certain equities and ETFs that, upon listing, have terms of greater than 12 months. With the exception of the longer maturity date, equity and ETF LEAPS® specifications are the same as those for regular-term equity options. (Certain Index products may have Long-dated options, and investors should refer to the specifications at the exchange site(s) for descriptions on those.)
Unit of Trade: 100 of the underlying shares per standard option contract.
Premium Quotations: Option premiums are stated in points and decimals; one point equals $100. The minimum price change for a series trading below $3 is $.05 ($5) and for all other series is $.10 ($10) per contract. Some exchange programs allow for premium quotations in $.01 increments.
Strike Price Intervals: Initial strike prices are generally set within 25% above or below the underlying stock's price and cannot be within $1 of an another strike for that LEAPS® series. Participation in various exchange programs may exempt a product from standard listing procedure.
Exercise Style: Equity and ETF LEAPS® are American-style options. The option may be exercised any business day prior to the expiration date.
Exercise Settlement Time: Exercise notices tendered on any business day will result in delivery of the underlying shares on the second (T+2) business day following exercise.
Expiration Month and Date: LEAPS® options expire on the third Friday in January.
Position Limits: Positions must be aggregated with those of any other option on the same underlying security for the purpose of position and exercise limits. Investors may check position limit reports from OCC's website for more information.
Minimum Customer Margin: Purchases of puts or calls with nine months or less until expiration must be paid for in full. Writers of uncovered puts or calls must deposit / maintain 100% of the option proceeds* plus 20% of the aggregate contract value (current equity price x $100) minus the amount by which the option is out-of-the-money, if any, subject to a minimum for calls of option proceeds* plus 10% of the aggregate contract value and a minimum for puts of option proceeds* plus 10% of the aggregate exercise price amount. Margin requirements for some broad-based ETFs may vary.
*For calculating maintenance margin, use the option's current market value instead of the option proceeds.
Trading Hours: 9:30 a.m. to 4:00 p.m. ET; 9:30 a.m. to 4:15 p.m. ET for some broad-based ETF LEAPS®