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   Low Exercise Price Options (LEPOs)
   















 

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Low Exercise Price Options (LEPOs)

An option introduced in Switzerland and Finland and under consideration in other countries to avoid the stamp duties sometimes imposed on stock trading, to facilitate the equivalent of short sales, and to create a risk transfer and financing instrument for shares which are not freely transferable. A LEPO will have a strike price very close to zero and, hence, will provide all of the features of stock ownership except voting rights and dividends. LEPOs may be cash settled if there are restrictions on transfer of the underlying to foreign investors. See also Single Issue Options, Zero Strike Price Options.

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