Long-Term Equity Anticipation Securities - LEAPS

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Dictionary Says

Definition of 'Long-Term Equity Anticipation Securities - LEAPS'

Publicly traded options contracts with expiration dates that are longer than one year.  Structurally, LEAPS are no different than short-term options, but the later expiration dates offer the opportunity for long-term investors to gain exposure to prolonged price changes without needing to use a combination of shorter-term option contracts. The premiums for LEAPs are higher than for standard options in the same stock because the increased expiration date gives the underlying asset more time to make a substantial move and for the investor to make a healthy profit.
Investopedia Says

Investopedia explains 'Long-Term Equity Anticipation Securities - LEAPS'

LEAPS are an excellent way for a longer-term trader to gain exposure to a prolonged trend in a given security without having to roll several short-term contracts together. The ability to buy a call/put option that expires one or two years in the future is very alluring because it gives the holder exposure to the long-term price movement without the need to invest the larger amount of capital that would be required to own the underlying asset outright. These long-term options can be purchased not only for individual stocks, but also for equity indexes (such as the S&P 500). 

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