Long-term equity anticipation securities (LEAPS) are a type of option contract that give the buyer the right, but not the obligation, to buy (in the case of a call option) or sell (in the case of a put option) an underlying security at a specified price on or before a specified date. LEAPS are similar to standard options contracts, but they have longer expiration dates, typically ranging from six months to three years.
LEAPS can be used for a variety of purposes, including hedging against risk, speculating on the future price of a security, or generating income. They are often used by investors who want to make a long-term bet on a particular stock or index. LEAPS can also be used to create complex trading strategies.