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LEAPS

Discussion in 'Shares' started by tonyused, 29th Jan, 2008.

  1. tonyused

    tonyused Active Member

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    Has anyone heard of Long-term Equity Anticipation Securities (LEAPS) and are they listed & traded on ASX.

    They are, apparentley, a longer term option trading strategy. When would you use them?
     
  2. Tropo

    Tropo Well-Known Member

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  3. tonyused

    tonyused Active Member

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    Thanks Tropo, I couldn't find anything to do with them at ASX either.

    It seems they are more an American derivative, probably due to the larger market there.
     
  4. DaveJ

    DaveJ Well-Known Member

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    No LEAPS don't exist for the Australian Market... They are a US instrument.

    The closest alternative would be LEPO's But even then they are not the same.

    ASX Low Exercise Price Options

    Is there a strategy that you particularly want LEAPs for?


    DaveJ
     
  5. The Stig

    The Stig Well-Known Member

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    I thought Warrants were the closest thing we had to LEAPS.
     
  6. AsxBroker

    AsxBroker Well-Known Member

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  7. The Stig

    The Stig Well-Known Member

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    Hi Dan, I know what LEAPS are in the US, but I was of the opinion that the closest thing we had to a long term option that wasted, was a Warrant.

    I haven't traded a warrant for nearly 10 years so my knowledge of warrants is a bit rusty. But I basically thought they were a long term option that were traded with the issurer (OTC). Long term meaning longer than 9 months. Yeah?
     
  8. AsxBroker

    AsxBroker Well-Known Member

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    Hi Stig,

    Warrants are only OTC as they are issued only by a third party.

    Options can either be issued by the exchange or by a third party, hence being both these would be similar to LEAPS...

    "Equity LEAPSĀ®
    Long Term Equity Anticipation Securities (LEAPS) are long term options available on approximately 450 equities and 10 indexes. LEAPS provide investors with a longer term view of the market as a whole or on an individual stock. As with traditional short term options, LEAPS are available in two types, calls and puts."

    from Equity LEAPS Specifications

    With the full potential time of decay, warrants are similar.

    I guess as there is no exact match that we have, the LEAPs are somewhere in between a few (possibly Endowment Warrants which had a 10 year expiry).

    Cheers,

    Dan
     
  9. tonyused

    tonyused Active Member

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    Thanks for all the comments and the usefull information you all have given me.

    At least I know there are instuments on the ASX & in Australia that can be used in a similar fashion to LEAPS.