Series 7 practice questioneasyOptions — LEAPS
LEAPS (Long-Term Equity AnticiPation Securities) differ from standard listed options primarily in that they:
- AHave expiration dates up to three years from the listing date✓ Correct answer
- BCan only be purchased on index options
- CDo not trade on exchanges
- DHave no time value component
Explanation
Why A — Have expiration dates up to three years from the listing date
LEAPS are long-term options with expiration dates that can extend up to three years from the listing date, compared to standard options that typically expire within nine months. They function identically to standard options in all other respects but give investors a longer time horizon.
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