Understanding Leaps: Using the Most Effective Option Strategies for Maximum Advantage [Hardcover]

Marc Allaire (Author), Marty Kearney (Author)

Book Description

Publication Date: August 15, 2002

Long-term Equity AnticiPation Securities (LEAPS) were first introduced by the Chicago Board Options Exchange (CBOE) in late 1990. Since then, trading in LEAPS has grown substantially, both in terms of contract scope and trading volume. In its first year of trading, LEAPS had a volume of 625,000. By 1999, trading volume had increased 1,920 percent to 12.4 million, with over 19 billion dollars in trading value. In response to this growing phenomenon, Irwin published the classic LEAPS: What They Are and How to Use Them for Profit and Protection by Harrison Roth in 1994. To date, this is the only book on LEAPS and it has quietly sold over 18,000 copies, translating into about 540,000 dollars in revenue. Since 1994, much has changed in the area of LEAPS with the onset of new investment vehicles such as exchange-traded funds. While the Roth book is mostly based on theory, this book, Understanding LEAPS: How to Use the Most Effective Options Strategies for Maximum Advantage takes a much more practical, hands-on approach and is based on years of hard data and trading experience to really see what works now and what doesn't. This book is a comprehensive, up-to-date guide to understanding and using LEAPS. Like a conventional equity option, a LEAP gives the owner the right to buy or sell an individual stock or an underlying basket of stocks at or within a given time at a pre-specified price. In essence, LEAPS are longer-term stock or index options. What this book does is explain what a LEAP is, what the differences between options and LEAPS are, and how to best use LEAPS. It provides investors with the best option strategies for trading and investing LEAPS and shows them when to use those particular strategies for maximum advantage. Understanding LEAPS not only provides essential strategies and techniques, it introduces new material that has never been covered before. With a whole section on index LEAPS, this book provides the most up-to-date strategies for the newest option products, including exchange-traded funds. This valuable guide also provides: A review of the basic concepts of options and LEAPS; Optimal strategies with practical examples for implementation; Additional techniques that are unique only to LEAPS; The underlying theories and principles of how options and LEAPS work; Whether you're an intelligent investor who has never traded options before or a seasoned professionals, with Understanding LEAPS, you will learn how LEAPS can increase capital, limit losses, and protect profits.

Editorial Reviews

About the Author

Marc Allaire is a consultant to the Chicago Board Options Exchange and other firms involved in the options market. A former senior staff instructor at the Chicago Board Options Exchange's Options Institute, Allaire was a featured contributor to the CBOE's landmark book Options: Fundamental Concepts and Trading Strategies and is a regular contributor to professional publications on options, LEAPS, and trading strategies. Marty Kearney is a senior staff instructor at The Options Institute, helping brokers learn to use LEAPS and other conservative options strategies effectively. A featured contributor to Options: Fundamental Concepts and Trading Strategies, Kearney has appeared on CNBC, Group W, and the CBS Radio Network and contributed to Barron's, Ticker, Derivatives Week, and other publications.

Product Details

• Hardcover: 320 pages
• Publisher: McGraw-Hill Companies; 1st edition (August 15, 2002)
• Language: English
• ISBN-10: 0071383867
• ISBN-13: 978-0071383868
• Product Dimensions: 9.3 x 5.8 x 1 inches
• Shipping Weight: 1.6 pounds
• Average Customer Review: 4.0 out of 5 stars  See all reviews (4 customer reviews)
• Amazon Best Sellers Rank: #1,130,698 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

36 of 36 people found the following review helpful:

5.0 out of 5 stars Superb Text on the Use of LEAPS, July 7, 2007

By 

Jeffrey R. Elver "jeff82" (Whitefish Bay, Wisconsin USA) - See all my reviews
(REAL NAME)   

Amazon Verified Purchase

This review is from: Understanding Leaps: Using the Most Effective Option Strategies for Maximum Advantage (Hardcover)

This book is one of the best options texts I've ever read. The material is presented in a clear, easy to understand manner and is less technical than the McMillan books, but is still useful to the experienced options investor.

One thing I like about the book is that it defines the difference between trading and investing and presents strategies for both options traders and investors (though I disagree with the manner in which he differentiates the two groups).

As the title indicates, the book concentrates on LEAPS strategies and presents a number of conservative uses for these instruments. Included in these strategies are stock replacements, covered call writing, spreads and using deep-in-the-money LEAPS as an alternative to margining stocks.

I've been an options investor for nearly 30 years and employ the more conservative strategies mentioned above to enhance the returns on my equity portfolio. While Allaire writes in a manner that is understandable to the novice, I was impressed with the subtle issues and practicle considerations he discusses for each of the strategies.

He also does not over hype the strategies as so many other writers do. This is another reason for giving the book a five-star rating.

13 of 14 people found the following review helpful:

5.0 out of 5 stars Information-Rich LEAPS Book, August 22, 2009

By 

Mark F. LaMoure "Willpower=Waypower" (Boise, ID) - See all my reviews

This review is from: Understanding Leaps: Using the Most Effective Option Strategies for Maximum Advantage (Hardcover)

Mark LaMoure, Boise,ID

POWERFUL SUCCESS
Do you want more Time, Safety and Security for option investing and higher profits? The truth is, one of the biggest ways money is lost in option trading is from buying too short of a length of time for investing. Discover the book "Understanding LEAPS" by authors Marc Allaire and Marty Kearney for higher success. Copyright 2003.

You can solve the problem of too little time by buying LEAPS. They last longer than a typical stock option. LEAPS last from 7 months and go up to 3 years in the future. LEAPS should be understood by every profit-minded investor for their precious, high-powered time benefits. LEAPS can be very powerful.

LEAPS cost you about 50-90% less in price than stock, providing potentially bigger profits. Learn more about LEAPS and their profitable benefits today. Discover new possibilities.

SPARKLING ESSENCE
Ignite a new fire in your heart for winning. "Understanding LEAPS" is a premium book with insider tips and some strategies unique only to LEAPS. The book shows how LEAPS increase capital, limit losses and protect profits.

Learn the true story for investing with LEAPS. The Authors wrote a hands-on guidebook defining "what, when, where, why and how" on LEAPS. The two authors write about advantages of LEAPS for both the Basic to Advanced investor.

RATED HIGHLY
Looking at the book's promising Table Of Contents, you see 25 Chapters and 278 pages of gold-grade material. The book is comprehensive and highly rated. I compared five similar books on LEAPS to "Understanding LEAPS." Its clearly the best of the five, by far. So I rate the book at least 5 stars.

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0 of 1 people found the following review helpful:

2.0 out of 5 stars Buy LEAPS at your own risk, October 20, 2011

By 

Random Walker (Albuquerque, NM United States) - See all my reviews

Amazon Verified Purchase

This review is from: Understanding Leaps: Using the Most Effective Option Strategies for Maximum Advantage (Hardcover)

I did and lost big time. LEAPS are just as dangerous as any other option. Stay away from options unless you are a professional.