LEAPS® Options Explained

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Options FAQ: LEAPS® & Cycles

Frequently asked questions about options

LEAPS® & Cycles Questions

  • What are cycles and how are they affected when LEAPS® are listed?
  • Where can I find information on LEAPS® options and various strategies based on LEAPS®?
  • I recently attended a seminar where the instructor said that some brokers recognize LEAPS® securities as stocks and will allow writing of covered calls against LEAPS®, even in retirement accounts. I have searched since this time and have not found a broker that will allow this strategy in a retirement account. Do you have a suggestion?
  • I own a number of LEAPS® options on a specific stock. From what I read in the press, the company is planning to spin off a significant portion of their corporation which obviously will reduce the price of their stock. Can you tell me how option contracts will be treated, if and when this spin off occurs? Will we be given LEAPS® for the new corporation or compensated in some other way for the reduced value of the options for what will amount to a smaller corporation with a lower stock price and consequently a lower value for its LEAPS®?
  • When are the exchanges going to list 2020 LEAPS®?
  • Where can I get a complete LEAPS® list?
  • The exchanges used to list LEAPS earlier in the year. When did they change the procedures? And why do the exchanges list fewer LEAPS than in years past?

LEAPS® & Cycles Answers

Q: What are cycles? And how are they affected when LEAPS® are listed?

A: Options on a given stock are listed according to one of the following expiration cycles:

Q-1 Q-2 Q-3 Q-4
Cycle 1 January April July October
Cycle 2 February May August November
Cycle 3 March June September December

At any given time, there will normally be four different expiration months trading on a particular stock. All stocks will have options listed for the two upcoming expiration months along with two months from their expiration cycle. The table below illustrates the months listed for each cycle throughout the year, beginning on the first day of the year. The most recently listed months are boldfaced.

At start of calendar year…

Cycle 1 January February April July
Cycle 2 January February May August
Cycle 3 January February March June

…the above months are listed.

After January expires…

Cycle 1 February March April July
Cycle 2 February March May August
Cycle 3 February March June September

…September is added to Cycle 3.

After February expires…

Cycle 1 March April July October
Cycle 2 March April May August
Cycle 3 March April June September

…October is added to Cycle 1.

After March expires…

Cycle 1 April May July October
Cycle 2 April May August November
Cycle 3 April May June September

…November is added to Cycle 2.

After April expires…

Cycle 1 May June July October
Cycle 2 May June August November
Cycle 3 May June September December

…December is added to Cycle 3.

After May expires…

Cycle 1 June July October January
Cycle 2 June July August November
Cycle 3 June July September December

…January is added to Cycle 1.

After June expires…

Cycle 1 July August October January
Cycle 2 July August November February
Cycle 3 July August September December

…February is added to Cycle 2.

After July expires…

Cycle 1 August September October January
Cycle 2 August September November February
Cycle 3 August September December March

…March is added to Cycle 3.

After August expires…

Cycle 1 September October January April
Cycle 2 September October November February
Cycle 3 September October December March

…April is added to Cycle 1.

After September expires…

Cycle 1 October November January April
Cycle 2 October November February May
Cycle 3 October November December March

…May is added to Cycle 2.

After October expires…

Cycle 1 November December January April
Cycle 2 November December February May
Cycle 3 November December March June

…June is added to Cycle 3.

After November expires…

Cycle 1 December January April July
Cycle 2 December January February May
Cycle 3 December January March June

…July is added to Cycle 1.

After December expires…

Cycle 1 January February April July
Cycle 2 January February May August
Cycle 3 January February March June

…August is added to Cycle 2.

When determining the cycle to which a particular stock belongs, pull up a chain of its options match the 3rd and 4th expiration months with the relevant table above, and identify the cycle.

Q: Where can I find information on LEAPS® options and various strategies based on LEAPS®?

A: You can find delayed quotes for LEAPS® here on our site under Quotes. Once you have entered a symbol and selected “Detail Options Chains”, choose “LEAPS only” in the “Expiration” dropdown menu. Also in under the strategies section you will find a discussion of various strategies involving options. For a comprehensive list of stocks on which LEAPS® are traded you may want to look at our LEAPS® list (XLS).

Q: I recently attended a seminar where the instructor said that some brokers recognize LEAPS® securities as stocks and will allow writing of covered calls against LEAPS®, even in retirement accounts. I have searched since this time and have not found a broker that will allow this strategy in a retirement account. Do you have a suggestion?

A: Buying a long-term call and selling short-term calls against it, an example of a calendar spread, is a popular strategy. However, while the calls being written are hedged, they are not considered to be “covered.” In the event of assignment, because of the 1-day lag between exercise and assignment, using the long-term call to close out the position would require being short the stock for a day. And many brokerages do not allow short stock positions in retirement accounts under any circumstances. We can only suggest that you continue searching for a broker that allows this strategy.

Q: I own a number of LEAPS® options on a specific stock. From what I read in the press, the company is planning to spin off a significant portion of their corporation which obviously will reduce the price of their stock. Can you tell me how option contracts will be treated, if and when this spin off occurs? Will we be given LEAPS® for the new corporation or compensated in some other way for the reduced value of the options for what will amount to a smaller corporation with a lower stock price and consequently a lower value for its LEAPS®?

A: If an upcoming spin off has just been announced, the terms of a possible adjustment may not be immediately known. Although the exact adjustment may not be known, it is safe to assume that existing option contracts will be adjusted so that an option holders’ potential equity would not be diluted. There are 4 things you can do that are proactive in locating information regarding adjusted contracts due to splits, mergers and spin offs.

  • First, if you want to receive a notice when information is made public about an option adjustment, you may sign up with the OIC’s automated e-mail system at http://www.optionseducation.org/resources/email_alerts.jsp.
  • Second, if you are unsure whether an option has been adjusted, you can visit the OIC Market Data area. This will bring you to the Information Memos section that explains how a contract may be adjusted. (This is also a great place to learn about previous adjustments due to splits, spin offs and mergers.)
  • Third, always check with your brokerage firm before placing the option trade.
  • Fourth, you can call the Options Investor Services at 1-888-OPTIONS for further explanation of those Information Memos.

If the spin off information is not available at our website, it will be posted as soon as the OCC receives all of the relevant facts from the parties involved in the corporate action and after the vote of the Securities Committee. Generally, a definitive adjustment determination is announced as soon as practical after all pertinent facts become available.

Distributions of property other than the underlying security may require different adjustments. For example, outstanding options might be adjusted to include the distributed property.

EXAMPLE: If XYZ “spins off” its subsidiary ABC by distributing to its stockholders 1 shares of ABC stock for each 5 shares of XYZ stock, outstanding XYZ options might be adjusted to require delivery of 100 shares of XYZ stock plus 20 shares of ABC stock at the original strike price in question.

Q: When are the exchanges going to list 2020 LEAPS®?

  • Monday, September 12, 2020: January 2020 LEAPS® listed
  • Monday, October 17, 2020: January 2020 LEAPS® listed
  • Monday, November 14, 2020: January 2020 LEAPS® listed

Q: Where can I get a complete LEAPS® list?

A: You can access a complete LEAPS® list here:

Q: The exchanges used to list LEAPS earlier in the year. When did they change the procedures? And why do the exchanges list fewer LEAPS than in years past?

A: In September 2008, the U.S. options exchanges and The Options Clearing Corporation (OCC) received Securities and Exchange Commission approval to standardize many of the listing criteria found in the Options Listing Procedure Plan (OLPP). Due to listing of many one-point strikes (16, 17, 18, 19, etc.) as well as other products, such as Quarterly options, the options exchanges decided to list LEAPS only on products that have an average daily volume of at least 1000 contracts. The dates for next year’s LEAPS listing can be found here.

The relevant language related to this topic has been excerpted below and can be found on Page 8 of the OLPP (link to the OLPP can be found below):

(e) With regard to the listing of new January Long-term Equity AnticiPation (“LEAP”) series on equity option classes, options on Exchange Traded Funds (“ETF”), or options on Trust Issued Receipts (“TIR”), the Series Selecting Exchange and any other exchange that lists and trades the same option class shall not add new LEAP series on that option class:
(i) Earlier than September (which is 28 months before the expiration), for an option class on the January expiration cycle;
(ii) Earlier than October (which is 27 months before expiration), for an option class on the February expiration cycle; and
(iii) Earlier than November (which is 26 months before expiration), for an option class on the March expiration cycle.

Exchanges that list and trade the same equity option class, ETF option class, or TIR option class are authorized to jointly determine and coordinate with OCC on the date of introduction of new LEAP series for that option class consistent with the above paragraph.
(f) The Series Selecting Exchange shall not list new LEAP series on equity option classes, options on ETFs, or options on TIRs in a new expiration year if the national average daily contract volume, excluding LEAP and FLEX series, for that options class during the preceding three calendar months is less than 1,000 contracts, unless the new LEAP series has an expiration year that has already been listed on another exchange for that option class. The preceding volume threshold does not apply during the first six months an equity option class, option on an ETF, or option on a TIR is listed on any exchange.

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Reference ID: #42c13230-797a-11ea-a4da-efe95656af3a

Оптимизация запросов. Основы EXPLAIN в PostgreSQL (часть 3)

Предыдущие части:

ORDER BY

QUERY PLAN
— Sort (cost=117993.01..120493.04 rows=1000010 width=37) (actual time=571.591..651.524 rows=1000010 loops=1)
Sort Key: c1
Sort Method: external merge Disk: 45952kB
-> Seq Scan on foo (cost=0.00..18334.10 rows=1000010 width=37) (actual time=0.007..62.041 rows=1000010 loops=1)
Total runtime: 690.984 ms
(5 rows)

Сначала производится Seq Scan таблицы foo . Затем сортировка Sort . В выводе команды EXPLAIN знак -> указывает на иерархию действий (node). Чем раньше выполняется действие, тем с большим отступом оно отображается.
Sort Key — условие сортировки.
Sort Method: external merge Disk — при сортировке используется временный файл на диске объёмом 45952kB .

Прошу разбирающихся в теме разъяснить различия между external merge и external sort .

Проверим с опцией BUFFERS:

QUERY PLAN
— Sort (cost=117993.01..120493.04 rows=1000010 width=37) (actual time=568.412..652.308 rows=1000010 loops=1)
Sort Key: c1
Sort Method: external merge Disk: 45952kB
Buffers: shared hit=8334, temp read=5745 written=5745
-> Seq Scan on foo (cost=0.00..18334.10 rows=1000010 width=37) (actual time=0.010..68.203 rows=1000010 loops=1)
Buffers: shared hit=8334
Total runtime: 698.032 ms
(7 rows)

Действительно, temp read=5745 written=5745 — во временный файл было записано и прочитано 5745 блоков по 8Kb = 45960Kb. Операции с 8334 блоками были произведены в кэше.

Операции с файловой системой более медленные, чем операции в оперативной памяти.
Попробуем увеличить объём используемой памяти work_mem :

QUERY PLAN
— Sort (cost=117993.01..120493.04 rows=1000010 width=37) (actual time=265.301..296.777 rows=1000010 loops=1)
Sort Key: c1
Sort Method: quicksort Memory: 102702kB
-> Seq Scan on foo (cost=0.00..18334.10 rows=1000010 width=37) (actual time=0.006..57.836 rows=1000010 loops=1)
Total runtime: 328.746 ms
(5 rows)

Sort Method: quicksort Memory: 102702kB — сортировка целиком проведена в оперативной памяти.

QUERY PLAN
— Index Scan using foo_c1_idx on foo (cost=0.42..34327.57 rows=1000010 width=37) (actual time=0.023..126.076 rows=1000010 loops=1)
Total runtime: 153.452 ms
(2 rows)

Из действий осталось только Index Scan , что заметно отразилось на скорости выполнения запроса.

LIMIT

Удалим ранее созданный индекс.

QUERY PLAN
— Seq Scan on foo (cost=0.00..20834.12 rows=100 width=37) (actual time=0.033..94.757 rows=3824 loops=1)
Filter: (c2

‘ab%’::text)
Rows Removed by Filter: 996186
Buffers: shared hit=8334
Total runtime: 94.924 ms
(5 rows)

Ожидаемо, используются Seq Scan и Filter .

QUERY PLAN
— Limit (cost=0.00..2083.41 rows=10 width=37) (actual time=0.037..0.607 rows=10 loops=1)
Buffers: shared hit=26
-> Seq Scan on foo (cost=0.00..20834.12 rows=100 width=37) (actual time=0.031..0.599 rows=10 loops=1)
Filter: (c2

‘ab%’::text)
Rows Removed by Filter: 3053
Buffers: shared hit=26
Total runtime: 0.628 ms
(7 rows)

Производится сканирование Seq Scan строк таблицы и сравнение Filter их с условием. Как только наберётся 10 записей, удовлетворяющих условию, сканирование закончится. В нашем случае для того, чтобы получить 10 строк результата пришлось прочитать не всю таблицу, а только 3063 записи, из них 3053 были отвергнуты ( Rows Removed by Filter ).
То же происходит и при Index Scan .

Создадим новую таблицу, соберём для неё статистику.

Запрос по двум таблицам

QUERY PLAN
— Hash Join (cost=13463.00..49297.22 rows=500000 width=42) (actual time=87.441..907.555 rows=500010 loops=1)
Hash Cond: (foo.c1 = bar.c1)
-> Seq Scan on foo (cost=0.00..18334.10 rows=1000010 width=37) (actual time=0.008..67.951 rows=1000010 loops=1)
-> Hash (cost=7213.00..7213.00 rows=500000 width=5) (actual time=87.352..87.352 rows=500000 loops=1)
Buckets: 65536 Batches: 1 Memory Usage: 18067kB
-> Seq Scan on bar (cost=0.00..7213.00 rows=500000 width=5) (actual time=0.007..33.233 rows=500000 loops=1)
Total runtime: 920.967 ms
(7 rows)

Сначала просматривается ( Seq Scan ) таблица bar . Для каждой её строки вычисляется хэш ( Hash ).
Затем сканируется Seq Scan таблица foo , и для каждой строки этой таблицы вычисляется хэш, который сравнивается ( Hash Join ) с хэшем таблицы bar по условию Hash Cond . Если соответствие найдено, выводится результирующая строка, иначе строка будет пропущена.
Использовано 18067kB в памяти для размещения хэшей таблицы bar .

QUERY PLAN
— Merge Join (cost=1.69..39879.71 rows=500000 width=42) (actual time=0.037..263.357 rows=500010 loops=1)
Merge Cond: (foo.c1 = bar.c1)
-> Index Scan using foo_c1_idx on foo (cost=0.42..34327.57 rows=1000010 width=37) (actual time=0.019..58.920 rows=500011 loops=1)
-> Index Scan using bar_c1_idx on bar (cost=0.42..15212.42 rows=500000 width=5) (actual time=0.008..71.719 rows=500010 loops=1)
Total runtime: 283.549 ms
(5 rows)

Hash уже не используется. Merge Join и Index Scan по индексам обеих таблиц дают впечатляющий прирост производительности.

QUERY PLAN
— Hash Left Join (cost=13463.00..49297.22 rows=1000010 width=42) (actual time=82.682..926.331 rows=1000010 loops=1)
Hash Cond: (foo.c1 = bar.c1)
-> Seq Scan on foo (cost=0.00..18334.10 rows=1000010 width=37) (actual time=0.004..68.763 rows=1000010 loops=1)
-> Hash (cost=7213.00..7213.00 rows=500000 width=5) (actual time=82.625..82.625 rows=500000 loops=1)
Buckets: 65536 Batches: 1 Memory Usage: 18067kB
-> Seq Scan on bar (cost=0.00..7213.00 rows=500000 width=5) (actual time=0.003..31.890 rows=500000 loops=1)
Total runtime: 950.625 ms
(7 rows)

Seq Scan ?
Посмотрим, какие результаты будут, если запретить Seq Scan.

QUERY PLAN
— Merge Left Join (cost=0.85..58290.02 rows=1000010 width=42) (actual time=0.024..353.819 rows=1000010 loops=1)
Merge Cond: (foo.c1 = bar.c1)
-> Index Scan using foo_c1_idx on foo (cost=0.42..34327.57 rows=1000010 width=37) (actual time=0.011..112.095 rows=1000010 loops=1)
-> Index Scan using bar_c1_idx on bar (cost=0.42..15212.42 rows=500000 width=5) (actual time=0.008..63.125 rows=500010 loops=1)
Total runtime: 378.603 ms
(5 rows)

По мнению планировщика, использование индексов затратнее, чем использование хэшей. Такое возможно при достаточно большом объёме выделенной памяти. Помните, мы увеличивали work_mem ?
Но, если память в дефиците, планировщик будет вести себя иначе:

QUERY PLAN
— Merge Left Join (cost=0.85..58290.02 rows=1000010 width=42) (actual time=0.014..376.395 rows=1000010 loops=1)
Merge Cond: (foo.c1 = bar.c1)
-> Index Scan using foo_c1_idx1 on foo (cost=0.42..34327.57 rows=1000010 width=37) (actual time=0.005..124.698 rows=1000010 loops=1)
-> Index Scan using bar_c1_idx on bar (cost=0.42..15212.42 rows=500000 width=5) (actual time=0.006..66.813 rows=500010 loops=1)
Total runtime: 401.990 ms
(5 rows)

А как будет выглядеть вывод EXPLAIN при запрещённом Index Scan ?

QUERY PLAN
— Hash Left Join (cost=15417.00..63831.18 rows=1000010 width=42) (actual time=93.440..712.056 rows=1000010 loops=1)
Hash Cond: (foo.c1 = bar.c1)
-> Seq Scan on foo (cost=0.00..18334.10 rows=1000010 width=37) (actual time=0.008..65.901 rows=1000010 loops=1)
-> Hash (cost=7213.00..7213.00 rows=500000 width=5) (actual time=93.308..93.308 rows=500000 loops=1)
Buckets: 65536 Batches: 2 Memory Usage: 9045kB
-> Seq Scan on bar (cost=0.00..7213.00 rows=500000 width=5) (actual time=0.007..33.718 rows=500000 loops=1)
Total runtime: 736.726 ms
(7 rows)

cost явно увеличился. Причина в Batches: 2 . Весь хэш не поместился в память, его пришлось разбить на 2 пакета по 9045kB.

Здесь опять прошу помощи гуру. Объясните, почему при LEFT JOIN и достаточном work_mem , использование Merge Left Join более затратно, чем Hash Left Join ?

На этом сегодня остановлюсь.

UPD.
Много полезного про индексы PostgreSQL рассказали Олег Бартунов и Александр Коротков.

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Внесу сюда ссылку на свежую статьи от PostgreSQL Индексы в PostgreSQL, часть 2, часть 3. Там многое разъяснено.

Tech Control

Long-Term Equity Anticipation Securities are long-term stock or index options. LEAPS are available in two types, calls and puts. They have expiration dates up to three years in the future.

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