Glossary L

Last (Price)

The price of the last transaction of a stock or option for a trading session.

Last Trading Day

The last business day prior to the option's expiration date during which options can be traded. For equity options, this is generally the third Friday of the expiration month. Note: If the third Friday of the month is an exchange holiday, the last trading day will be the Thursday immediately preceding the third Friday.


An acronym for Long-term Equity AnticiPation Securities. LEAPS are call or put options with expiration dates set as far as two years into the future. They function exactly like other, shorter-term exchange-traded options.

Leg(s) Legging:

A term describing one option of a spread position. When someone "legs" into a call vertical, for example, he might do the long call trade first and does the short call trade later, hoping for a favorable price movement so the short side can be executed at a better price. Legging is a higher-risk method of establishing a spread position, and TD Ameritrade STRONGLY suggests that if you decide to leg into a spread, you should, for margin and risk purposes, do the long trades FIRST. Please note that multiple-leg option strategies such as this can entail substantial transaction costs, including multiple commissions, which may impact any potential return.


The ability to control of a larger amount of money or assets with a smaller amount of money or assets, typically done by borrowing money or using options. If prices move favorably for a leveraged position, the profits can be larger than on an unleveraged position. However, if prices move against a leveraged position, the losses can also be larger than on an unleveraged position, but not necessarily with an options position. Buying stock on margin is using leverage. A long option position is leveraged because it "controls" a large number of shares with less money than it would take to maintain a position with the same number of shares.

Limit Move

Relating to futures markets, a limit move is an increase or decrease of a futures price by the maximum amount allowed by the exchange for any one trading session. Price limits are established by the exchanges, and approved by the Commodity Futures Trading Commission (CFTC). Limit moves vary depending on the futures contract.

Limit (Price) Order

An order that has a limit on either price or time of execution, or both. Compare to a market order that requires the order be filled at the most favorable price as soon as possible. Limit orders to buy are usually placed below the current ask price. Limit orders to sell are usually placed above the current bid price. Limit orders can be used when trading spreads. In markets with low liquidity or in fast markets, some traders use limits to ensure getting filled by putting in a limit order to buy at or above the ask price or a limit order to sell at or below the bid price.

Limited Power of Attorney

An authorization giving someone other than the beneficial owner of an account the authority to make certain investment decisions regarding transactions in the clients account.

Limited Trading Authorization

This authorization, usually provided by a limited power of attorney, grants someone other than the client to have trading privileges in an account. These privileges are limited to purchases and sales; withdrawals of assets is not authorized.


A transaction or transactions that offsets or closes out a stock or options position.


The ease with which a transaction in stock or options can take place without substantially affecting their price.

Liquidity Risk

The potential that an investor might not be able to buy or sell a security when desired.

Listed Options

An exchange-approved call or put traded on an options exchange with standardized terms. Listed options are fully fungible. In contrast, over-the-counter (OTC) options usually have non-standard or negotiated terms.

Listed Stock

The stock of a corporation that is traded on a securities exchange.

Loan Value

The maximum amount of money that can be borrowed in a margin account at a brokerage firm using eligible securities as collateral.


A term for a trader at the CBOT or CME who trades for his own account. They compete with each other to provide the best bid and ask prices for futures. Locals are basically the same type of traders that market makers are at the CBOE.

Locked Limit

Refers to a futures market that has moved its daily maximum amount and, if the move is up, no one is willing to sell. Conversely, if the move is down, no one is willing to buy. Hence, the market is "locked" at the limit price with no trading.


As a noun, it refers to people who have bought stock or options. As an adjective, it refers to a position of long stock or options. Compare to short.

Long Hedge

The strategy of buying puts as protection against the decline in the value of long securities.

Long Market Value

See Current Market Value.



Low (L)

In reference to the O,H,L,C, "L" represents the low price of the session.