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LEAPS®
Long-term Equity Anticipation Securities, or LEAPS®, are long-term stock or index options. LEAPS®, like all options, are available in two types, calls and...
Last Trading Day
The very last full day of open trading before an options expiration day, usually the third Friday of the expiration month.
Leg
A risk-oriented method of establishing a two-sided position. Rather than entering into a simultaneous transaction to establish the position (a spread, for...
Letter of Guarantee
A letter from a bank to a brokerage firm which states that a customer (who has written a call option) does indeed own the underlying stock and the bank wil...
Leverage
In investments, the attainment of greater percentage profit and risk potential. A call holder has leverage with respect to a stock holder - the former will...
Limit
See Trading Limit.
Limit Order
An order to buy or sell securities at a specified price (the limit). A limit order may also be placed "with discretion". In this case, the floor broker exe...
Listed Option
A put or call option that is traded on a national options exchange. Listed options have fixed striking prices and expiration dates. See also Over-the-Count...
Local
A trader on a futures exchange who buys and sells for his own account and may sometimes also fill public orders.
Lognormal Distribution
A statistical distribution that is often applied to the movement of stock prices. It is a convenient and logical distribution because it implies that stock...
Long Position
A position wherein an investor's interest in a particular series of options is as a net holder (i.e., the number of contracts bought exceeds the number of...