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Options 101
What Are LEAPS?
Most options expire in days. LEAPS expire in years - a completely different instrument with a different job.
NoVo Options Trading · 2026
LEAPS - Long-Term Equity Anticipation Securities - are simply options with expirations far in the future, typically a year or more out. They are the same instrument as any call or put, just with a long runway before expiration.
Why they behave differently
With so much time, LEAPS decay slowly - theta is small day to day. A deep-in-the-money LEAPS call behaves much like owning the stock, but for less capital, because its delta is high and its time decay is gentle. Investors use them as a leveraged, capital-efficient stock substitute.
The trade-offs
LEAPS carry more vega - they're sensitive to volatility swings - and more rho - sensitive to interest rates - than short-dated options. They tie up more capital per contract, and their spreads can be wider and less liquid. They're a position-holder's tool, not a scalper's.
A LEAPS is a slow-burn bet on a big-picture thesis. It's the opposite of a same-day scalp.
Where they fit - and don't
LEAPS suit long-horizon, directional convictions - a patient bet on a stock or index over months. They are the wrong tool for intraday trading, where you want short-dated contracts with high gamma and minimal capital tied up. Different job, different instrument - which is why a SPY 0-5 DTE system and a LEAPS investor are barely in the same sport.
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NoVo is a software tool for market analysis and for executing trades you initiate, not financial advice. This article is general education, not investment advice. Options trading involves substantial risk of loss, up to and including your entire capital. NoVo makes no guarantee of profit, win rate, or performance, and past results do not predict future outcomes. You are responsible for your own broker account, configuration, and trading decisions.