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LEAPS Options and Single Stock Futures

Michael Covel (March 25, 2005)

LEAPS® Options & Single Stock Futures
Learn to Use for Trend Following Profits

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Frequently Asked Questions

Long Term Equity Anticipation Securities (LEAPS®) are long term options available on over 1000 equities and 11 indexes. LEAPS® provide investors with a longer term view of the market as a whole or on an individual stock. As with traditional short term options, LEAPS® are available in two types, calls and puts.

Video Clip #1 on LEAPS® (Quicktime)
Video Clip #2 on LEAPS® (Quicktime)

Q. Can I trade regular options as a Trend Follower?
A. Regular options are not best for Trend Following. LEAPS® are superior. LEAPS® are perhaps the biggest enhancement to trend following in 20 years. They avoid the staggering effects of time decay unlike regular options. Managing time decay is what makes LEAPS® viable for trend following.

Q. Why are LEAPS® Options fantastic for Trend Followers?

A. LEAPS® Options gives Trend Followers another tool to trade trends in equity markets. LEAPS® allow you to maximize your returns. LEAPS® can also lower the cost required to enter a market and even mitigate drawdowns.

Q. What other advantages do LEAPS® have for Trend Followers?

A. Some brokerage firms place restrictions on the types of equity trades that individual and retirement accounts can place. LEAPS® can solve this potential problem.

Q. What are Single Stock Futures?
A. A description from OneChicago: "Single stock futures (SSF) are futures contracts on individual stocks. OneChicago lists futures on more than 85 well-known stocks such as IBM, Qualcomm and Microsoft. In late 2000, the U.S. Congress passed legislation lifting the ban on these products, which were already trading in Europe and elsewhere." Here is even more explanation.

Q. Are there good online resources to learn about Single Stock Futures?
A. There is a main location: OneChicago.

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