LEAPS, or long-term equity anticipation securities, are options contracts with expiration dates ranging from one to three years. These long-term options provide investors with the ability to hedge against potential losses in their stock positions. By purchasing LEAPS contracts, investors can protect their portfolios and limit their downside risk.

One common strategy for using LEAPS as a hedge is to purchase put options on a stock position. If the stock price drops below a certain level, the put options will increase in value, offsetting the losses on the stock position. This allows investors to limit their potential losses while still maintaining exposure to the upside potential of the stock.

Overall, using LEAPS as a hedge in options trading can provide investors with added protection and peace of mind. By strategically incorporating long-term options into their portfolios, investors can better manage risk and optimize their overall returns.#26#