Over the last several months, I’ve shown you several different options strategies that you can use to make serious money in the markets – simple call and put buys, bullish and bearish “Loophole Trades,” Straddles, and more.
But the constant in each of the strategies is that they have all been relatively short-term trade set ups designed to work within 20-30 days, with options that expire in about 45 days.
The mindset has been get in, get out and turn your profits pretty quickly – typically, the more efficiently you can use your capital, the better.
But I recognize that a lot of you come from a longer-term, buy-and-hold background. And I understand that this shorter-term, options-based way of generating income can be a bit much to take in as quickly as one would like.
So today, I’m going to show you a long-term options strategy you can use to boost your portfolio…
LEAPS is an acronym for Long-term Equity AnticiPation Securities (the P is often capitalized when it is written out to represent the P LEAPS to get the acronym to work).
These are options that allow for a longer time frame until expiration; you can buy many LEAPS as far out as two years and eight months before expiration.
They were created around 1990 and started out as only being available on stocks, but eventually became available on indexes and nowadays you can even find these on Exchange-Traded Funds (ETFs).
These are most often written, (but not exclusively) for January of whichever year up to two years out. Right now, in October 2015, you can buy LEAPS on underlying securities for October and November, whichever month comes next in that issue’s option expiration cycle, as well as and January 2016, 2017 and maybe even 2018. The January 2017 and 2018 would be considered LEAPS.
LEAPS options are in truth no different than their shorter-term siblings in that they have an expiration date, they can be found for both calls and puts, and they can be exercised at a given strike price.
But they come with some pretty terrific benefits…
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