Forex Options Trading Conditions

Vanilla Options

Currency Pairs

Available for trading in 44 currency pairs, including silver and gold.

Types

Calls (option to buy a currency at a specified strike price) and Puts (option to sell a currency at a specified strike price).

Amount

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 under volatile or illiquid markets.

Maturity

Tradable tenors from 1 day to 12 months.

Ausübung und Verfall

Anders als Vanilla-Devisenoptionen werden Touch-Optionen ausgeübt, wenn der Barrier-Wert (Auslösekurs) zu einem beliebigen Zeitpunkt vor Ablauf erreicht wird. Wenn der Barrier-Wert während der Laufzeit der Option nicht erreicht wurde, erfolgt bei einer No-Touch-Option die Auszahlung, während die One-Touch-Option automatisch verfällt.

Ein Auslösekurs oder Barrier-Wert gilt als erreicht, wenn der Spotmittelkurs des Währungspaares den Auslösekurs erreicht.

Wenn die Option ausgeübt wird, beträgt die Auszahlung 100% des Betrags der Basiswährung. Wenn sie ohne Ausübung verfällt, beträgt die Auszahlung Null (0).

Touch-Optionen können auch vor Ablauf (vor Erreichen des Auslösekurses) geschlossen werden, sodass Sie die Möglichkeit haben, das Engagement neu zu bewerten, falls sich Ihre Einschätzung der Marktentwicklung geändert hat.

Bei One-Touch-Optionen erfolgt die Auszahlung automatisch, wenn und sobald sie vor Ablaufdatum ausgelöst werden. Andernfalls (wenn der Auslösekurs nicht erreicht wurde) verfallen sie automatisch um 10.00 Uhr EST (New Yorker Zeit) am Ablaufdatum. Bei No-Touch-Optionen erfolgt die Auszahlung automatisch, wenn der Auslösekurs nicht vor 10.00 Uhr EST am Ablaufdatum erreicht wurde. Andernfalls werden sie, wenn der Auslösekurs erreicht wurde, automatisch glattgestellt.

Abrechnung und Auszahlung

Bei der Saxo Bank werden Touch Optionspositionen automatisch abgerechnet, wenn sie eine Auszahlung generieren. Die Auszahlung beträgt 100% der Basiswährung. Verfällt die Option ohne ausgeübt zu sein, beträgt die Auszahlung 0%.

Bei One Touch erfolgt dies, sobald der Auslösekurs erreicht ist; bei No Touch bei Fälligkeit, wobei angenommen wird, dass der Auslösekurs nicht erreicht wurde. Der Auslösekurs gilt als erreicht, wenn der durchschnittliche Kassapreis den Auslösekurs erreicht.

Obwohl P/L eine geschlossene Touch Option bildet (z. B. Kauf und Verkauf einer Option vor Ausübung/Verfall), kann sie beim Margenhandel mit anderen Produkten verwendet werden. Die Endabrechnung erfolgt am Ende des Tages (EOD) auf die gleiche Art und Weise wie die Abrechnung von Vanilla-Optionen.

Bei allen Positionen mit Preis und Auszahlung in einer anderen Währung als der Basiswährung des Kontos wird die Prämie und Auszahlung zum Kurs am Ende des Tages (EOD) in die Kontowährung umgerechnet. Diese Umrechnung findet Anwendung auf die anfängliche Positionierung, Glattstellung von bestehenden Positionen und auszulösende Positionen. Dazu gehört auch die Umrechnung des realisierten Gewinns und Verlustes in die Basiswährung des Kontos.

Price (premium)

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.

Expiry

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.

 
Exercise / Settlement

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.

Margin

The margin requirement is calculated per currency pair, to align with FX Spot tiered margins, and per maturity date. Read more about Margins.

Touch Options


Currency Pairs

EURUSD, GBPUSD, EURGBP, USDJPY, EURJPY and AUDUSD.

Types

One Touch and No Touch options are available.

Amount

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 under volatile or illiquid markets.

Maturity

Tradable tenors from 1 day to 12 months.

Price (premium)

Expressed as a % payout in the 1st currency. When buying an option the maximum loss is the premium paid, but when selling an option the writer receives the premium. The payout is reserved on account (and can not be used as collateral).

Barrier (trigger)

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. 

Tradability

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 to current spot. 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.

Expiry

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.

Exercise / Settlement

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.

Margin

The FX option margin calculation does not apply.

Netting of positions

Touch options of same type, expiry, and payout can net out.  No other netting of Touch options is allowed.

FX Options Risk Warning

An option is categorised as a red product as it is considered an investment product with a high complexity and a high risk.

You should be aware that in purchasing Foreign Exchange Options, your potential loss will be the amount of the premium paid for the option, plus any fees or transaction charges that are applicable, should the option not achieve its strike price on the expiry date

Certain options markets operate on a margined basis, under which buyers do not pay the full premium on their option at the time they purchase it. In this situation you may subsequently be called upon to pay margin on the option up to the level of your premium. If you fail to do so as required, your position may be closed or liquidated.

If you write an option, the risk involved is considerably higher than buying an option. You may be liable for margin to maintain your position and a loss may be sustained well in excess of the premium received.

By writing an option, you accept a legal obligation to purchase or sell the underlying asset if the option is exercised against you; however far the market price has moved away from the strike. If you already own the underlying asset that you have contracted to sell, your risk will be limited.

If you do not own the underlying asset the risk can be unlimited. Only experienced persons should contemplate writing uncovered options, then only after securing full detail of the applicable conditions and potential risk exposure.

Danish banks are required to categorise investment products offered to retail clients depending on the product’s complexity and risk as: green, yellow or red. For more information click here.