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Exchanges start options trading

Thursday, Feb. 28, 2002 | 11:02 a.m.

Long-term stock options of Mandalay Resort Group began trading on the Chicago Board of Exchange and the Pacific Exchange in San Francisco Monday.

The exchanges will allow traders to buy and sell "LEAPS," or long-term equity anticipation securities. These are options to purchase or sell stock, but have a longer term than other publicly traded stock options. Investors have the option of purchasing "call" LEAPS -- which give the investor the right to purchase stock at a fixed price by the expiration date -- or "put" leaps, which give an investor the ability to sell stock at a fixed price at a future date.

These fixed prices are known as the "strike" price; the exchanges are trading Mandalay LEAPS with strike prices of $25, $30 and $35. The LEAPS traded expire in January 2003 and January 2004.

Separately, the Pacific Exchange began trading MGM MIRAGE stock options Feb. 21.

The exchange is currently trading MGM MIRAGE options with expiration dates in March, April, June and September, with strike prices ranging from $17.50 to $40.

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