What is XPO?
An XPO is a perpetual option.
How Does XPO Work?
XPOs generally only exist in the United States.
Why Does XPO Matter?
XPOs give investors considerable flexibility, because they are not constrained by deadlines for exercising. Accordingly, they have the luxury of being able to wait a long time for theto hit a favorable price. One interesting aspect of this is that the Black-Scholes pricing model is often less useful in calculating the value of XPOs (due to the lack of date), and thus trading XPOs is often a matter of instinct.