文档介绍：UnderstandingUnderstanding StockStock
OptionsOptions
LEAPS® for the
Experienced Trader
Marty Kearney
Disclosures
Options involve risks and are not suitable for everyone. Prior to buying or selling options,
an investor must receive a copy of Characteristics and Risks of standardized Options.
Copies may be obtained by contacting your broker or the Options Industry Council at 440
S. LaSalle St., Chicago, IL 60605
In order to simplify putations, commissions, fees, margin interest and taxes have
not been included in the examples used in these materials. These costs will impact the
e of all stock and options transactions and must be considered prior to entering
into any transactions. Investors should consult their tax advisor about any potential tax
consequences.
Any strategies discussed, including examples using actual securities and price data, are
strictly for illustrative and educational purposes only and are not to be construed as an
endorsement, mendation, or solicitation to buy or sell securities. Past performance
is not a guarantee of future results.
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Presentation Outline
• Brief review of basics
• Why LEAPS®? Why bother?
• Strategies
– Planning a stock purchase (or gift)
– What stock traders should know
–“Covered writing” with LEAPS®
– LEAPS® protective puts and collars
– A year-end (LEAPS®) tax strategy
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LEAPS® - The Basics
• Long-term Equity AnticiPation Securities
• Expiration dates up to 2 1/2 years away
(., January 2004, January 2005)
• Different symbols / strikes
• Meaningful strikes, premiums
• All types of strategies
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LEAPS® - Rights & Obligations
CALLS PUTS
BUYERS RIGHT RIGHT
(holders)} to buy to sell
SELLERS OBLIGATION OBLIGATION
(writers)} to sell to buy
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LEAPS® Terms
• Strike price
• Premium
• Expiration
• Exercise/Assignment (European / American)
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LEAPS® - Ticker Symbols
Different root ticker symbols
– Wal Mart Stock symbol: WMT
Regular Option symbol: WMT
LEA