990 
Index spreading (continued) 
spreads using options, 583-584 
options, using in index spreads, 584-587 
striking price differential, 587 
volatility differential, 587 
summary, 588 
Value Line Index, 579, 582 
Inflection points, 792-793 
Insider trading, 7 45-7 46 
Institutional block positioning, 482-485 (see also 
Mathematical applications) 
Institutional use of market basket strategies, 556 
Inter-index spreading, 579-587 (see also Index 
spreading) 
"Interest play" strategy, 438-439 
Interest rates, effects of on LEAPS, 371-37 4 
Intermarket futures spreads, 700-704 
Intermediate-term trading, call buying and, 102-103 
Intramarket futures spreads, 697-700 
iShares, 638 
Japanese Nikkei 225 Index, 532, 601 
Kicker, 136, 169 
LEAPS (Long-term Equity AnticiPation Securities), 5, 
367-410 
basics, 368-369 
expiration date, 368 
standardization less, 368 
striking price, 369 
type,368 
underlying stock and quote symbol, 368 
and call buying, 95 
definition, 367 
dividends, effects of, 371-37 4 
to establish collar, 279 
history, 367 
and implied volatility, 735, 736 
index options, 505-506 
interest rates, effects of, 371-372 
and long-term trading, 103 
options, 616-617 
popularity, 367 
pricing, 369-37 4 
rho, 864-865 
selling, 390-403 
assignment, early, 401-402 
covered writing, 390-396 
incremental return, 391 
rolling down, 394 
Index 
short LEAPS instead of short stock, 400-402 
straddle selling, 402-403 
uncovered call selling, 399-400 
uncovered LEAPS, 396-399 
whipsaw, 403 
short-term options, three sets of comparison with, 
374-375 
and speculative option buying, 382-390 
buying "cheap," advantages of, 385-386 
delta, 387-390 
less risk of time decay, 383-385 
spreads using, 403-409 
backspreads,407-408 
bull spread using calls, 403-404 
calendar spreads, 408-409 
diagonal, 405-407 
strategies, 375-382 
buying LEAPS as initial purchase instead of buy-
ing common stock, 378-381 
LEAPS instead of short stock, 382 
margin, using, 380-381 
protecting existing stock holdings with LEAPS 
puts, 381-382 
as stock substitute, 375-378 
summary, 409-410 
symbols, 26-27 
writing against, 91, 94 
"Leg" into spread, 171 
out of spread, 180, 207 
out of put calendar spread, 335 
Letter of guarantee, 43 
Limit bid, 679 
Limit offered, 680 
Limit order, 28, 33 
"Locals," 509 
Locked-in loss, 73-76 
Locking in profits, four strategies for, 108-1 11 
Lognormal distribution of stock prices, 783-81 I 
(See also Stock prices, distribution oO 
Long-term Equity AnticiPation Securities (LEAl'Si 
See also LEAPS 
Long-term trading, call buying and, 103 
Maintenance margin, 509 
Major Market Index (XMI), 499 
Market basket of stocks, 531-537 (see also Stock ind,·\ 
hedging strategies) 
Market dynamics, nonquantifiable, as influt·11t·,· 011 
market price, 15 
Market-makers, 22 
Market order, 32 
Market not held order, 33 
"Married" put and stock for tax purposC's, !J:l I