LEAPS (finance) - Wikipedia

When most individual investors use options trading information , they think of short-term bets, options trading articles tell us. But options can be just as effectively used by the longer-term investors to gain leverage that simply going long a stock does not afford.

LEAPS (finance) - Wikipedia

In other words, you can be an investor, not a trader, using options. My advice would be to by deep-in-the-money LEAPS.

LEAPS stands for Long-Term Equity Anticipation Securities, and refers to options with expirations that are further than one year out.

LEAPS: Options for the Long Term

And you can use these options to go long, as well as short. If you believe the Lipitor patent expiration will really hurt Pfizer Inc.

Make believe you are actually investing. Apple selling one iPad every two seconds, or Pfizer facing a Lipitor patent expiration without a replacement product are two good long-term stories.

Also, use your imagination and look at ETFs, too. For example, if you want to play the euro story, you can buy LEAPS on an ETF like the CurrencyShares Euro Trust NYSE: See also, 3 Ways to Profit From the Euro Zone Crisis.

Yes, LEAPS are already long-term options, but I mean buying ones that expire in or as opposed to Look for LEAPS with a fairly wide range of strike prices and go for ones that are deep in the money. Make sure there are at least 1, open contracts for that expiration date, and at least open contracts for that strike price.

Buying LEAP Options | Long Term Options - The Options Playbook

With LEAPS you should be prepared for volatility that is higher than you get with a stock, but less than with a shorter-term option, and then manage your stop losses accordingly. This position should change over time depending on fluctuations in the stock price.

Or, if it moves against you, consider selling the first position at a loss and moving to another strike price with more leverage. If trading LEAPS with an investing mindset is an approach that appeals to you, start slowly and only use your speculative money, i.

Longer-term options are carry less risk than short-term options, but they are still options. Article printed from InvestorPlace Media, http: Financial Market Data powered by FinancialContent Services, Inc. Nasdaq quotes delayed at least 15 minutes, all others at least 20 minutes. Breaking news sponsored by googletag.

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