Bottom Line
In the end, LEAPS are a great way for long-term investors to gain exposure to an ETF’s potential upside or downside over the long-term. But, leverage is a double-edged sword and the stronger potential gains on the upside are just as strong as the potential losses on the downside. As a result, investors should always be aware of the risks before buying a LEAPS position.
Justin Kuepper writes for ETFdb, which offers a comprehensive and original ETF database and analytical consulting services for advisors and investors, as well as a free newsletter. Learn more about their services by visiting ETFdb.com. Disclosure: the author had no positions in the securities named in this article at the time of writing.