Perpetual options

[milo]

Does anyone know if perpetual options are currently traded on a US exchange? I remember reading somewhere that a US exchange was considering them....

also, if anyone knows/trades them, it would be nice to hear how you use them.

thanks

[Leth]

hmm...i googled perpetual options and found out that they are "options with no maturity date, infinitely lived."

this is the first time ive ever heard about them to be honest. if perptual options are traded on american exchanges...which i have never seen them before...they definately sound expensive.

sorry i couldnt be of much help milo...

...good luck

leth

[milo]

thanks leth.

I did some research too and found this: http://finance.bi.no/~bernt/gcc_prog...00000000000000

it does not mention whether perpetual options are traded on a US exchange or not but I remember reading somewhere that the Philadelphia exchange was considering them.

so to sum up, isn't a perpetual options risk/reward basically the same as the underlying's? it should be the case, since they never expire...I may be wrong of course.

thanks

[Leth]

Originally Posted by milo

so to sum up, isn't a perpetual options risk/reward basically the same as the underlying's? it should be the case, since they never expire...I may be wrong of course.

i think you made a good assumption...it would definately make sense if they still gave you the same 10 to 1 leverage on the underlying. id say they would also be priced somewhat higher than leaps.
i do however find it hard to believe that they would actually allow them to be traded, since alot of the risk is taken away without some type of time decay.
id like to have some on the S&P500 as an investment since its bias to the bull side over the long-term. now whether i would actually pay a high price for them is a "whole notha" story.

good post milo...very interesting. if you hear anything else about them...lemme know...im curious.

leth

[ChaosTheory]

Originally Posted by milo

thanks leth.

I did some research too and found this: http://finance.bi.no/~bernt/gcc_prog...00000000000000

it does not mention whether perpetual options are traded on a US exchange or not but I remember reading somewhere that the Philadelphia exchange was considering them.

so to sum up, isn't a perpetual options risk/reward basically the same as the underlying's? it should be the case, since they never expire...I may be wrong of course.

thanks

I can confirm what milo is saying regarding the Philly exchange. they were touting them at the Money Show or Trader's Expo about 2 years ago. Then, I guess they didn't go forward with them anymore.

[BuyLowSellHigh]

most perpetual options are priced using bsm with 100-year durations

[newbie]

this might be a dumb question: what's bsm?