368 Part Ill: Put Option Strategies 
THE BASICS 
Certain facets of LEAPS are the same as for other listed equity options, while others 
involve slight differences. The amount of standardization is considerably less, which 
makes the simple process of quoting LEAPS a bit more tedious. LEAPS are listed 
options that can be traded in a secondary market or can be exercised before expira­
tion. As with other listed equity options, they do not receive the dividend paid by the 
underlying common stock. 
Recall that four specifications uniquely describe any option contract: 
1. the type (put or call), 
2. the underlying stock name (and symbol), 
3. the expiration date, and 
4. the striking price. 
Type. LEAPS are puts or calls. The LEAPS owner has the right to buy the stock at 
the striking price (LEAPS call) or sell it there (LEAPS put). This is exactly the same 
for LEAPS and for regular equity options. 
Underlying Stock and Quote Symbol. The underlying stocks are the 
same for LEAPS as they are for equity options. The base symbol in an option quote 
is the part that designates the underlying stock. For equity options, the base symbol 
is the same as the stock symbol. However, until the Option Price Reporting Authority 
( OPRA) changes the way that all options are quoted, the base symbols for LEAPS are 
not the same as the stock symbols. For example, LEAPS options on stock XYZ might 
trade under the base symbol WXY; so it is possible that one stock might have listed 
options trading with different base symbols even though all the symbols refer to the 
same underlying stock. Check with your broker to determine the LEAPS symbol if 
you need to know it. 
Expiration Date. LEAPS expire on the Saturday following the third Friday of 
the expiration month, just as equity options do. One must look in the newspaper, ask 
his broker, or check the Internet (www.cboe.com) to determine what the expiration 
months are, however, since they are also not completely standardized. When LEAPS 
were first listed, there were differing expiration months through December 1993. At 
the current time, LEAPS are issued to expire in January of each year, so some 
attempt is being made at standardization. However, there is no guarantee that vary­
ing expiration months won't reappear at some future time.