Low Exercise Price Option
In 1995 the Australian Stock Exchange started listing of new exchange traded option product called a Low Exercise Price Option (LEPO). A LEPO is a European style call option with a low exercise price of $0.01 and a contract size of 1000 shares to be delivered on exercise.
LEPOs are traded on margin. The premium is close to the whole share price, and a trader only posts margin, not the full price. Both the buyer and the seller are margined, all positions are marked-to-market daily. LEPOs work like a futures contract.
Read more about Low Exercise Price Option: Differences From Standard Options, Pricing of Low Exercise Price Options
Famous quotes containing the words exercise, price and/or option:
“The whole commerce between master and slave is a perpetual exercise of the most boisterous passions, the most unremitting despotism on the one part, and degrading submissions on the other. Our children see this, and learn to imitate it.”
—Thomas Jefferson (1743–1826)
“I cannot think of punishing him ... merely for coveting that liberty for which we have paid the price of so much blood, and have proclaimed so often to be the right, and worthy pursuit of every human being.”
—James Madison (1751–1836)
“A self-respecting nation is ready for anything, including war, except for a renunciation of its option to make war.”
—Simone Weil (1909–1943)