LEAPS, or Long-term Equity Anticipation Securities, are options contracts with expiration dates extending beyond one year, often up to two or three years. In the context of crypto, LEAPS would refer to analogous long-dated options on underlying digital assets, providing extended exposure or hedging capabilities. They offer a prolonged investment horizon.
Mechanism
LEAPS function by offering a leveraged investment vehicle or risk management tool over an extended period, allowing market participants to express longer-term directional views or hedge positions without the frequent rollover associated with short-term options. The valuation of crypto LEAPS incorporates time decay and volatility over a protracted horizon. Their extended duration changes their sensitivity to market factors.
Methodology
Strategic application of crypto LEAPS involves their use in capital-efficient strategies for long-term speculation or portfolio protection, often within institutional options trading frameworks. These instruments allow for positions that are less sensitive to short-term market fluctuations. This approach aligns with macro-level digital asset investment theses, offering flexibility for extended market views.
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