SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Expirationless Options (XPOs)- The Next Big Thing
XPO 141.32+0.1%Dec 26 9:30 AM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Tech Master who wrote (14)7/8/2005 11:44:05 AM
From: Win-Lose-Draw  Read Replies (1) of 60
 
XPOs will always trade at a fraction of the cost of the underlying asset (I'd guess around 50%)

There is nothing to guess - right around 55% is where other markets using perpetuals have converged to.

And that is *precisely* the point - because the XPO is pegged to the price of the underlying, your profit/loss is strictly 1:1 with the underlying. No P/L advantage to holding the XPO, and the price discount reflects the increased risk of holding the XPO relative to holding the underlying (plus some other nigglies.)
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News