What are LEAPS and how do i buy and sell them with Ameritrade?

Question

I heard about a guy that made a million bucks in the last few months buying LEAPS, what are they and how do i use my ameritrade or ETrade account to buy and sell LEAPS?

Answer 1

Long-term Equity AnticiPation Securities (LEAPS) are option contracts with expiration dates more than eight months in the future.

To trade any option contracts, including LEAPS, with any brokerage you need to get permission from the brokerage by certifying that you understand the risks associated with options trading.

Remember that options are "zero sum" investments which means that for every dollar one investor makes on an option contract someone else loses a dollar on the same contract. You will be an amatuer competing against professionals when you start trading options, so unless you have done a lot of studying ahead of time you can expect to lose money when you start trading.

Answer 2

I too have the same question