Expirationless Options (XPOs)- The Next Big Thing Message Board

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Strategies & Market Trends : Expirationless Options (XPOs)- The Next Big Thing

XPO 141.09

+0.7%

Dec 24 12:59 PM EST

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To: Moominoid who wrote (11)	7/18/2005 10:34:32 AM
From: VLD3	Read Replies (2) of 60

There are currently two broad classes of assets that don't expire: equities and currencies. Equities are priced by "expectation" - how much someone thinks they are going to increase (decrease) in price. Currencies are priced by "relationship" - their value in relation to another asset (currency). Seems like pricing XPOs would be a combination of the two - the relationship between the XPO and the underlying, other strike prices and expiring options, and the expectation of price accumulation (or depreciation) in the underlying. Interesting part is that these assets that don't expire are 99+ percent of the total volume of traded assets. That would lead me to expect that XPOs, by that measure alone, would have heavy trading volumes as well.

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