LEAPS refers to Long Term Equity AnticiPation Security.  These are options that consist of longer terms than average, as in the date of expiration.  LEAPS are not as common as other options but are still available on roughly 2,500 equities and 20 indexes.  However, like short-term options, LEAPS are also available for calls or puts. 

Options for LEAPS are traditionally created with expiration cycles of three months, six months or nine months, with no option term exceeding a year’s worth of time.  While there might be some exceptions now, traditional LEAPS are still the majority.  LEAPS are relatively new to the market and may extend as long as 2-3 years out.  As is the general rule, the farther away the expiration date, the more expensive the option is.  LEAPS are also available for indices now, as opposed to merely equities.

LEAPS are popular tools of investors who hope to reduce their risks.  [...]

An interesting article today in the WSJ talk about how more and more small investors are trading options. The sad par tis most of these investors do not the true danger of the options they are trading. Only too late do they realize that buying options is a losing proposition.

The good news is the more options are traded the more liquidity they will have and the more competition among brokers will lead to lower commissions for all of us.

here is the article:

http://online.wsj.com/article/SB125202073403184971.html?ru=yahoo&mod=yahoo_hs#articleTabs%3Darticle

By JEFF D. OPDYKE

Most investors are hoping stock prices push higher. The short-sellers want stocks to sink lower. And then there is Marlene Sackheim: She hopes the market goes nowhere.

The 57-year-old chief financial officer of her husband’s pain-management clinic in Pensacola, Fla., trades options for herself and other family members. Her preferred strategy — colorfully dubbed a naked strangle — rakes in the money when the Standard & Poor’s [...]