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Understanding LEAPS: Using the Most Effective Options Strategies for Maximum Advantage by Marc Allaire

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CHAPTER 13Other LEAPS Strategies

In the previous chapters, we saw some of the more popular options strategies using LEAPS. Are these the only ones available? Obviously not. This chapter will attempt to explain some of the LEAPS strategies that are not covered elsewhere, and discuss whether they are a practical alternative as an investment or strategy.

TIME SPREADS

A time spread is also known as a calendar spread or horizontal spread. These terms are interchangeable. We will refer to this strategy as a time spread. A time spread is the purchase of an option and the simultaneous writing of the same type of option (call or put) with the same strike price but of a different month. With AOL at $46.88, our example is to buy 1 AOL LEAPS 17½-month January ...

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