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:
“Not the less does nature continue to fill the heart of youth with suggestions of his enthusiasm, and there are now men,—if indeed I can speak in the plural number,—more exactly, I will say, I have just been conversing with one man, to whom no weight of adverse experience will make it for a moment appear impossible, that thousands of human beings might exercise towards each other the grandest and simplest of sentiments, as well as a knot of friends, or a pair of lovers.”
—Ralph Waldo Emerson (1803–1882)
“It doesn’t do good to open doors for someone who doesn’t have the price to get in. If he has the price, he may not need the laws. There is no law saying the Negro has to live in Harlem or Watts.”
—Ronald Reagan (b. 1911)
“You don’t merely give over your creativity to making a film—you give over your life! In theatre, by contrast, you live these two rather strange lives simultaneously; you have no option but to confront the mould on last night’s washing-up.”
—Daniel Day Lewis (b. 1957)