Recently was on a phone interview and getting into very basics of options strategy and different ways of hedging. Was asked to compare LEAPS (Long-term equity anticipation securities) to basic call options.
Is there any difference between a long-term call option that expires a year and a half out and a LEAP call? Or is it simply just that call options are generally used for a shorter time horizon, but a call with an expiration pretty far out is the exact same as a LEAP call.
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my impression was always LEAPS have duration of more than 1 year and calls are less than 1....variation with risk, etc applies but the basics are duration
LEAP = call with long time to expiration... not sure if there is a definitive point where you would call an option a leap vs a call, but i usually think of leaps as call options with >1 yr to expiration
LEAPs also only expire in January if I recall correctly
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