FX options trading conditions
Saxo’s FX Vanilla option offering provides the possibility to both buy and sell European style options, giving clients the opportunity to express a directional view in two different ways. FX options not only enable clients to express a directional trading view but also offer more alternatives in relation to controlling risk, in addition to a traditional stop loss order.
The holder of an option (long) pays a premium for the right to exercise the option at a profit, or let the option expire with no further obligation. The writer of an option (short) receives the premium and assumes the possible liability of having to pay the difference between the strike price and market price at maturity.
The pricing model Saxo applies for FX Vanilla options is based on the Black-Scholes model. The price is calculated in pip terms of the 2nd currency. Pricing is available for options with maturities from 1 day to 12 months, providing you with maximum flexibility to implement your trading strategies and market views.
Available for trading in 44 currency pairs, including silver and gold.
Calls (option to buy a currency at a specified strike price) and Puts (option to sell a currency at a specified strike price).
Maximum streaming amount is 25,000,000 units of base currency, with a minimum ticket size of 10,000 units. Notional amounts over the maximum streaming amount are available on a Request for Quote (RFQ) basis.
Note: Maximum streaming amounts may be changed without prior notice to reflect markets conditions.
Tradable tenors from 1 day to 12 months.
Calculated in pip terms of the 2nd currency. When buying an option the maximum loss is the premium paid, but when selling an option the writer receives the premium however assumes the potential of much greater downside risk.
European-style (the option can only be exercised on the expiry date, i.e. at a single pre-defined point in time).
Expiry is an automatic process, meaning you do not have to call in to manage the exercise or expiry. If the option is in the-money it will automatically settle in the pre-defined exercise method (described in the next point), or the option will automatically expire (cease to exist) at 10am Eastern Standard Time (New York cut) on the expiry date.
At trade entry, you have the choice of the exercise method that will apply should the option end up in-the-money. Options can be converted into a spot position on expiry or cash settled. The cash settled exercise method is available on both long and short positions and will always be executed at the mid-price of the best bid/offer spread. This applied even in volatile market conditions. The exercise method can be modified up to one hour prior to expiry.
The margin requirement is calculated per currency pair, to align with FX Spot tiered margins, and per maturity date. Read more about Margins.
Not available. Trading is only available on live quotes.
Small trade sizes incur a minimum ticket fee of 1 USD. A small trade size is any trade below the commission threshold which for most currency pairs is 50,000 units of base currency, however variations occur.
Saxo’s FX Touch option offering provides the possibility to both buy and sell One Touch and No Touch options, giving clients the opportunity to express a directional view in two different ways.
The holder of an option (long) pays a premium and possibly receives a payout. The writer of an option (short) receives the premium and possibly has to pay the payout. The pricing model that Saxo uses is similar to the one applied to Vanilla options (based on Black-Scholes model), with the price being expressed as a percentage of the potential payout. Spreads may vary depending on the life of the option and the currency pair.
EURUSD, GBPUSD, EURGBP, USDJPY, EURJPY and AUDUSD.
One Touch and No Touch options are available.
Expressed as the potential payout. The maximum streaming amount is 25,000 units of base currency, with a minimum ticket size of 100 units. Notional amounts above the maximum streaming amount are available on a Request for Quote (RFQ) basis.
Note: Maximum streaming amounts may be changed without prior notice to reflect markets conditions.
Tradable tenors from 1 day to 12 months.
The maximum streaming amount is 25,000 units of base currency, with a minimum ticket size of 100 units. Notional amounts above the maximum streaming amount are available on a Request for Quote (RFQ) basis. Tradable tenors from 1 day to 12 months.
Cena Touch opcie sa označuje ako prémia a je vyjadrená ako percento potenciálneho vyplatenia. Napríklad pri nominálnej veľkosti 1 000 a cene 10 % bude prémia 100 jednotiek základnej meny a vyplatenie bude 1 000 jednotiek základnej meny. Za dlhé pozície platíte prémiu a za krátke pozície prémiu prijímate.
Príklad:
- Ak pár EURUSD dosiahne hodnotu 1,1500, do dvoch týždňov môžete získať prípadnú platbu 1 000 EUR. Prémia opcie One Touch je 20 %.
- Za opciu zaplatíte EUR 200 (EUR 1,000 x 20 %).
- Ak spotová cena páru EURUSD dosiahne pred exspiráciou hodnotu 1,1500, dostanete vyplatenie 1 000 EUR (čistý zisk 800 EUR).
- Ak nedosiahne spúšťaciu úroveň 1,1500, vaša obchodná strata bude počiatočná prémia, ktorú ste za opciu zaplatili (200 EUR).
At Saxo Bank FX Touch options can be either bought or sold.
| Trading Long (buying) | When buying an option, you have to pay the full Premium in cash. The Premium is subtracted from the Cash Balance (initially shown as 'Transactions not booked'. At the end of the day it is subtracted from the Cash Balance). The current value (positive) of the bought position is displayed in 'Non-margin positions' and subtracted from 'Not available as margin collateral'. Thus, you cannot use the value of Touch options for margin collateral. | |
| Trading Short (selling) | When selling (writing) an option, you need to have the cash sufficient for the potential payout in the event of an exercise (One Touch) or expiry (No Touch). The Premium is added to the Cash Balance (initially shown as 'Transactions not booked'. At the end of the day it is added to the Cash balance). The current value (negative) of the sold position is displayed in 'Non-margin positions'. In order to reserve the full potential payout the difference between the current value and the potential payout is subtracted from 'Not available as margin collateral'. Hence, your full potential loss from the option payout is thus not available for margin collateral. |
Trade barriers above or below the current spot price, in increments of 50 pips.
Unlike FX Vanilla options, Touch options are exercised when a trigger level is reached at any time prior to the expiry date. If the trigger level has not been reached, a No Touch option generates a payout, whereas a One Touch option expires automatically.
A trigger (or barrier) level is considered reached if the spot mid-price of the currency pair reaches the trigger level.
There are safeguards in place to prevent erroneous trading. Thus, for each currency pair a 'tradability value' has been set. The rationale for this parameter is to restrict your trading when the probability of the trigger being touched (or not touched) is too close to 100%. This is done to protect the client from making a mistake, e.g. paying 100% for a One Touch or selling a No Touch when the bid is 0%.
The current parameters are:
| Currency cross | Tradability value | Currency cross | Tradability value |
| EURGBP | 0.25% | GBPUSD | 0.15% |
| EURJPY | 0.20% | USDJPY | 0.25% |
| EURUSD | 0.15% | AUDUSD | 0.20% |
Please note that the tradability values are subject to change without prior notice.
You are of course never restricted from closing an existing open position, no matter what the proximity of the trigger level is to the current spot price. Closing prices may, if close to expiry, be offered on an RFQ basis only.
Example:
You want to buy a One Touch option with 3 months to expiry and the trigger (or barrier) price is 10 pips away from the market. In this case, the Premium would be 100% (or close to) and Saxo Bank will automatically reject the trade.
One Touch options will generate the payout automatically if triggered before expiry. Otherwise (if the barrier has not been touched) the option will automatically expire and cease to exist at 10am Eastern Standard Time (New York cut). No Touch options will cease to exist if triggered before expiry (the barrier level is touched). If a No Touch option has not been triggered prior to expiry, the payout will automatically be generated.
Touch option positions are cash settled automatically when they generate a payout. The payout is 100% of the base currency. If the option expires without exercising, then the payout is 0%. For a One Touch option, that is once the trigger level is reached. For a No Touch option, it is at maturity, assuming the trigger level has not been reached.
Although profit/loss from a closed Touch option (e.g. buying and selling an option before it exercises/expires) will be available for use in trading other margin products, final settlement takes place at end of day (EOD), similar to the way Vanilla options are settled.
The FX option margin calculation does not apply.
Not available. Trading is only available on live quotes.
Touch options of same type, expiry, and payout can net out. No other netting of Touch options is allowed.
Holiday Overview
During holidays, markets and exchanges around the world are closed at certain times. Upcoming holiday schedules will be posted below.