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Strategies & Market Trends : Expirationless Options (XPOs)- The Next Big Thing -- Ignore unavailable to you. Want to Upgrade?

To: Win-Lose-Draw who wrote (12)	7/8/2005 11:29:13 AM
From: Tech Master	Read Replies (1) \| Respond to of 60

The paper describes why XPOs cannot be priced as the same price as the underlying equity. Pricing models are only tool for pricing guidance. All exchange traded instruments are ultimately priced based on supply and demand. That will certainly be the case here. No useful purpose? I beg to differ. XPOs will always trade at a fraction of the cost of the underlying asset (I'd guess around 50%). Therefore, unless you want the dividend or voting rights, you'll always consider the XPO first. I predict a market changing product. Time will tell.