This makes them especially appealing to investors who want to participate in the long-term growth of a stock without tying up as much capital as buying the shares outright.

LEAP Puts give the buyer the right to sell a stock at a predetermined strike price. Traders may purchase LEAP puts if they  leap trading  believe a stock will decline in value over the long run, or as a form of insurance (hedging) against losses in a portfolio.

Because LEAPs extend further into the future, they allow investors to hold a position in a stock for years while committing less capital than buying shares directly. For example, instead of spending \$10,000 to buy 100 shares of a company trading at \$100, an investor might purchase a LEAP call option for a fraction of that cost, securing exposure to the same 100 shares over the long term.

One of the biggest advantages of LEAPs is that they allow investors to control a large number of shares with relatively little money. This makes it easier for traders with limited capital to gain exposure to high-priced stocks.

Since options amplify returns, a small price move in the underlying stock can result in significant percentage gains for LEAP holders. If the stock rises as expected, the returns on LEAP calls can far exceed those of simply owning the stock.

Unlike short-term options that may expire before a stock makes its anticipated move, LEAPs provide more time for an investment thesis to play out. This reduces the pressure of short-term volatility.

Investors can use LEAP puts as a form of long-term insurance on their portfolios. For instance, a portfolio manager holding a large amount of tech stocks could buy LEAP puts on the NASDAQ index to protect against a potential market downturn.

Despite the benefits, LEAPs are not without risks:

Premium Costs**: Because LEAPs provide more time, they are more expensive than short-term options. If the stock does not move as expected, the investor could lose the entire premium paid.