How can an investor use DJX options for long-term portfolio management?
Long-term Equity AnticiPation SecuritiesTM (LEAPS?) based on the Dow Jones Industrial Average offer investors an exciting new way to take a long-term position in the stock market with quantified risk at a fraction of the cost of purchasing shares of stock. Finally, investors can capitalize on their long-term forecasts for the market, up to three years in the future, with one transaction. The investment time frame of LEAPS is much longer than that of traditional DJX options. While traditional options provide opportunity to capture market gains due to short-term, even daily, fluctuations in the market, LEAPS based on the DJIA allow investors to buy and hold a market position for up to three years. Investors need not predict precise timing of the market movements to profit – they need only correctly predict market trends over time. And like all options transactions, the buyer’s risk is limited to the amount of the premium paid (plus commissions). LEAPS offer the possibility to generate a
