LEAPS® & Cycles
This FAQ covers strategies based on LEAPS® options, retirement accounts and coverage of call options, and timeframes for LEAPS® listings. Read the introduction to LEAPS® options and cycles below to learn more. Once you are prepared to begin investing, complete your Forever Winning Trade online application and open your individual investment account today!
Where can I find information and strategies based on LEAPS® options?
Find delayed LEAPS® options quotes here on our site under Quotes. Once you have entered a symbol and selected "Detail Options Chains," choose "LEAPS only" in the "Expiration" dropdown menu.
The Getting Started tab has a whole section dedicated to the discussion of LEAPS®. Also, under the Strategies and Advanced Concepts section, find a discussion of various strategies involving options.
Do some brokers recognize LEAPS® securities as stocks and allow writing of covered calls against LEAPS®, even in retirement accounts?
Many online options brokerages do not allow short stock positions in retirement accounts under any circumstances. Buying a long-term call and selling short-term calls against it is a popular strategy called a calendar spread. While this hedges the written calls, brokerage firms do not consider them to be covered. In the event of assignment, because of the one-day lag between exercise and assignment, using the long-term call to close out the position requires being short the stock for a day.
When are the exchanges going to list 2017 LEAPS®?
2017 LEAPS will be rolled out over a three month period.
Cycle 1: Monday, September 15th, 2014: January 2017 LEAPS® listed
Cycle 2: Monday, October 13th, 2014: January 2017 LEAPS® listed
Cycle 3: Monday, November 17th, 2014: January 2017 LEAPS® listed
To view the 2014 Options Expiration Calendar with LEAPS® listing dates click here.
Click here to view an online version of OCC's expiration calendar.
Why do the exchanges list LEAPS® later in the year than in years past? Why do the exchanges list fewer LEAPS® than in years past?
In September 2008, the U.S. options exchanges and OCC received Securities and Exchange Commission approval to standardize many of the listing criteria found in the Options Listing Procedure Plan (OLPP). Due to listing of many one-point strikes (16, 17, 18, 19, etc.) as well as other products, such as quarterly and weekly options, the options exchanges decided to list LEAPS® only on products that have a 3 month average daily volume of at least 1,000 contracts.
The relevant language related to this topic has been excerpted below and can be found on Page 8 of the OLPP (link to the OLPP can be found below):
(e) With regard to the listing of new January Long-term Equity AnticiPation ("LEAP") series on equity option classes, options on Exchange Traded Funds ("ETF"), or options on Trust Issued Receipts ("TIR"), the Series Selecting Exchange and any other exchange that lists and trades the same option class shall not add new LEAP series on that option class:
(i) Earlier than September (which is 28 months before the expiration), for an option class on the January expiration cycle;
(ii) Earlier than October (which is 27 months before expiration), for an option class on the February expiration cycle; and
(iii) Earlier than November (which is 26 months before expiration), for an option class on the March expiration cycle.
Exchanges that list and trade the same equity option class, ETF option class, or TIR option class are authorized to jointly determine and coordinate with OCC on the date of introduction of new LEAP series for that option class consistent with the above paragraph.
(f) The Series Selecting Exchange shall not list new LEAP series on equity option classes, options on ETFs, or options on TIRs in a new expiration year if the national average daily contract volume, excluding LEAP and FLEX series, for that options class during the preceding three calendar months is less than 1,000 contracts, unless the new LEAP series has an expiration year that has already been listed on another exchange for that option class. The preceding volume threshold does not apply during the first six months an equity option class, option on an ETF, or option on a TIR is listed on any exchange.
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