While I was reading an article “demystifying options part 7” by a fellow trader (Wayne) whom I’d followed and learnt, it sets me thinking does LEAPS resemble warrants? You can find the link to his article all the way at the bottom. So options and LEAPS, rights and warrants, do they look uncannily similar at a glance, or are they not?My brief understandings as follow,Options:An option is a contract that grants investors the right, but not the obligation to buy or sell specified amount of shares over a scheduled period of time, which has a tenure usually from weeks to months. Simply for a shorter term.LEAPS:An abbreviation for Long-term Equity Anticipation Securities, is a derivative of options, which has a tenure usually in a year or 2. Simply means longer term options.Rights:A right also g
If you are not familiar with options, I would suggest reading my first 6 posts:Part 1 - Introduction to optionsPart 2 - Selling Put optionsPart 3 - Buying Put optionsPart 4 - Selling Call optionsPart 5 - Buying Call optionsPart 6 - Common Issues faced when selling or buying optionsWhat are LEAPS?LEAPS (Long-term Equity AnticiPation Securities) refers to option contracts with expiration dates longer than a year, and can go up to 3 years. If you hear people saying they are selling or buying LONG PUTs or LONG CALLs, they are referring to LEAPS.What is the difference between LEAPS and normal options?LEAPS are just normal options with long expiration dates. They are traded the same way as normal PUT and CALL options. You can BUY and SELL them just like normal options.Where can I find LEAPS?You