What does LEAPS stand for? 

leaps

In finance, Long-term Equity AnticiPation Securities (LEAPS) are derivatives that track the price of an underlying financial instrument (stocks or indices). They are option contracts with a much longer time to expiry than standard options. According to the Options Industry Council, the educational arm of the Options Clearing Corporation, LEAPS are available on stocks and indexes that have an average daily trading volume of at least 1000 contracts. As with standard options, LEAPS are available in two forms, calls and puts. Options were originally created with expiry cycles of 3, 6, and 9 months, with no option term lasting more than a year. Options of this form, for such terms, still constitute the vast majority of options activity. LEAPS were created relatively recently and typically extend for terms of 2 years out. Equity LEAPS typically expire in January. For example, if today were December 2020, one could buy a Microsoft option that would expire in January of 2021, 2022, or 2023. The latter two are LEAPS. In practice, LEAPS behave and are traded just like standard options. When LEAPS were first introduced in 1990, they were derivative instruments solely for stocks; however, more recently, equivalent instruments for indices have become available. These are also referred to as LEAPS.

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