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Just wondering - do LEPO's have an active market here, i.e. whats the liquidity like? Also are LEPO's similar in function to CFD's?
LEPO's
- Thread starter cuttlefish
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Hello cuttlefish,
I can't comment on the liquidity of LEPOs to trade (having never traded them), but you'll find an information PDF on the ASX website that will answer many of your questions.
Now comparing these to installment/endowment Warrants would require fully investigating the terms and conditions for both instruments (you pay for LEPOs in installments borrowing the majority of the value, and pay margins if the underlying moves against your position).
A lot will depend on you risk tolerance, your objectives, and how much time you want to spend managing the position. You can use options around the central longer term instrument, but you really want to have a good relationship with a broker in order to reduce any collateral you may be required to lodge. Also, you really need to consider planning for a variety of market occurrences, and how you will deal with profit taking, limiting losses (exiting or hedging strategies) – basically controlling risk.
Regards,
Magdoran
I can't comment on the liquidity of LEPOs to trade (having never traded them), but you'll find an information PDF on the ASX website that will answer many of your questions.
Now comparing these to installment/endowment Warrants would require fully investigating the terms and conditions for both instruments (you pay for LEPOs in installments borrowing the majority of the value, and pay margins if the underlying moves against your position).
A lot will depend on you risk tolerance, your objectives, and how much time you want to spend managing the position. You can use options around the central longer term instrument, but you really want to have a good relationship with a broker in order to reduce any collateral you may be required to lodge. Also, you really need to consider planning for a variety of market occurrences, and how you will deal with profit taking, limiting losses (exiting or hedging strategies) – basically controlling risk.
Regards,
Magdoran
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