There are two types of equity options, calls and puts. A call option gives its holder the right to buy an underlying security, whereas a put option conveys the right to sell an
underlying security. Visit the "Equity Options Specification" link above for equity option contract details.
Long-term Equity AnticiPation Securities (LEAPS) are long-term option contracts that allow investors to establish positions that can be maintained for a period of up to three years.
The development and introduction of LEAPS by CBOE in 1990 added a whole new range of options possibilities, many suited for conservative stock investors. Current options investors are using LEAPS, as are stock investors, because of the similarities between LEAPS and shares of stock, and the more conservative nature afforded to LEAPS by their long-term expirations.
- Equity LEAPS calls can provide long-term stock market investors an opportunity to benefit from the growth of large capitalization companies without having to make outright stock purchases
- Equity LEAPS puts can provide a hedge for stock investors against substantial declines in underlying equities
- Current equity options users may also find LEAPS appealing if they desire to take a longer term position of up to three years in some of the same options they currently trade
Equity FLEX options allow users to custom tailor most contract terms and enjoy expanded position limits for exchange listed Equity and Index options. FLEX options offer investment professionals, holders of restricted stock, large stockholders, corporations and other types of investors the newest in risk management instruments, especially designed to extend access to customized derivative products. FLEX options provide you with:
- The price discovery of competitive auction markets.
- A secondary market to offset or alter positions.
- An independent daily valuation of prices.
- Contract guarantee and virtual elimination of trading counter party risk.