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A Low Exercise Price Option is an Australian Stock Exchange traded option with a low exercise price that was specifically designed to be traded on margin. It is a European style call option with a low exercise price of $0.01 and a contract size of 100 shares to be delivered on exercise.
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.
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