LEAPS® & Cycles

The exchanges list options on a given security 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 are at least four different expiration months trading on a particular security. All stocks & ETFs will have options listed for at least the two near-term expiration months along with two months from their expiration quarterly cycle. Recent exchange rules now allow for the listing of additional months beyond just four available expirations, so there are deviations from standard listing procedures.

The table below illustrates the standard 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, exchanges list the following months:

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

After January expires, exchanges add September to Cycle 3 and March to Cycles 1 & 2:

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

After February expires, exchanges add October to Cycle 1 and April to Cycles 2 & 3:

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

After March expires, exchanges add November to Cycle 2 and May to Cycles 1 & 3:

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

After April expires, exchanges add December to Cycle 3 and June to Cycles 1 & 2:

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

After May expires, exchanges add January to Cycle 1 and July to Cycles 2 & 3:

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

After June expires, exchanges add February to Cycle 2 and August to Cycles 1 & 3.

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

After July expires, exchanges add March to Cycle 3 and September to Cycles 1 & 2.

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

After August expires, exchanges add April to Cycle 1 and October to Cycles 2 & 3.

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

After September expires, exchanges add May to Cycle 2 and November to Cycles 1 & 3.

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

After October expires, exchanges add June to Cycle 3 December to Cycles 1 & 2.

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

After November expires, exchanges add July to Cycle 1 and January to Cycles 2 & 3.

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

After December expires, exchanges add August to Cycle 2 and February to Cycles 1 & 3.

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

While any security may have a unique expiration cycle, the follow approach will generally determine the specific expiration cycle for your target security. Pull up a chain of its options, match the third and fourth expiration months with the relevant table above and identify the corresponding cycle.

Many brokerages do not allow short stock positions in retirement accounts under any circumstances. Buying a long-term call and selling short-term calls against it is a popular strategy called a calendar spread. While this hedges the written calls, brokerage firms do not consider them to be covered. In the event of assignment, because of the one-day lag between exercise and assignment, using the long-term call to close out the position requires being short the stock for a day.

If a company announces an upcoming spin-off, we may not yet know the terms of a possible adjustment. Although we may not know the exact adjustment, it is safe to assume that existing option contracts may be adjusted to avoid diluting an option holders’ potential equity. For more information on how this type of corporate action is treated please see Chapter III of the Characteristics and Risks of Standardized Options.

Four things you can do to locate information regarding adjusted contracts due to splits, mergers and spin-offs include:

• OCC’s website offers contract adjustment memos with detailed information on how outstanding option contracts will be adjusted due to a corporate action.
• To receive notification for future adjustment memos, you may sign up to receive emails at the OCC Subscription Center at www.theocc.com/webapps/subscription-center.
• Check with your brokerage firm before placing the option trade.
• Contact OIC’s Investor Services at [email protected] for further explanation on information memos.

2019 LEAPS will be rolled out over a three month period.

Cycle 1: Monday, September 12th, 2016: January 2019 LEAPS® listed

Cycle 2: Monday, October 17th, 2016: January 2019 LEAPS® listed

Cycle 3: Monday, November 14th, 2016: January 2019 LEAPS® listed

To view the 2016 Options Expiration Calendar with LEAPS listing dates click here.

In September 2008, the U.S. options exchanges and 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 and weekly options, the options exchanges decided to list LEAPS® only on products that have a 3 month average daily volume of at least 1,000 contracts.

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.