Trading evolved: unveiling new opportunities with our updated pricing structure Trading evolved: unveiling new opportunities with our updated pricing structure Trading evolved: unveiling new opportunities with our updated pricing structure

Trading evolved: unveiling new opportunities with our updated pricing structure

Pricing 5 minutes to read
Koen Hoorelbeke

Options Strategist

Summary:  Explore the significant advantages of our Updated Pricing Structure in our latest analysis, 'Trading evolved: unveiling new opportunities.' This article examines the impact of our new commission tariffs, showing substantial cost reductions for various account types. We provide concrete examples demonstrating how these changes make advanced trading strategies more affordable and practical, especially for Classic, Platinum, and VIP account holders. Our revised pricing model is designed to enhance trading profitability and enable a wider range of strategies, reflecting our commitment to an efficient and accessible trading environment for all clients. Read on to understand how these essential changes can benefit your trading approach and outcomes.


Our new commission tariff structure brings a wave of cost savings to options traders. Under this unified pricing model, Classic, Platinum, and VIP account holders enjoy significant reductions in trading costs. Stock options are now 33% cheaper for Classic accounts and 50% less for Platinum accounts, while VIP clients see a decrease from 85 cents to 75 cents per contract. Contract options (options on indices) offer even greater savings, with a drop from USD 6 to USD 2 or  USD 3 to USD 1 per contract for Classic and Platinum accounts—a 66.67% reduction. Futures options are now priced at USD 3 for Classic, USD 2 for Platinum, and USD 1 for VIP accounts, a substantial decrease from the previous tariffs. This new pricing structure providing a cost-effective trading environment for our clients. See full specifications here.

What does this mean to you? Let's have a look at the implications of the new tariffs with a few examples of specific options strategies. Let's first have a look at a put (or call) vertical debit spread on a stock, which is a very common strategy and involves 2 legs (for example a put spread which consists of 1 bought put and 1 sold put).

Old pricing structure (Classic account)

  • Cost per leg to enter: USD 3

  • Total cost to enter the trade (2 Legs): 2 legs × USD 3/leg = USD 6

  • Cost per option/share for entry: USD 6 / 100 shares = USD 0.06 per share

  • Cost to exit the trade: Assuming similar costs, USD 0.06 per share 

New pricing structure (Classic account)

  • Cost per leg to enter: USD 2

  • Total cost to enter the trade (2 Legs): 2 legs × USD 2/leg = USD 4

  • Cost per option/share for entry: USD 4 / 100 shares = USD 0.04 per share

  • Cost to exit the trade: Assuming similar costs, USD 0.04 per share

Comparative analysis and summary

  • Entry cost reduction per share: USD 0.06 (old) - USD 0.04 (new) = USD 0.02 savings per share

  • Exit cost reduction per share: Similarly, USD 0.02 savings per share when closing the trade

  • Total savings for round-trip trade: USD 0.04 per share (entry and exit combined)

 

Now assume you would buy 10 of such debit spreads on the QQQs (the Nasdaq 100 ETF), and later sell them again (For example after a 50% take profit). Then, the price of one debit spread would, in the given example, cost USD 1.79 (based on an actual random strategy).

 

  • Under the old pricing structure, you would pay 6 cents per share/option to enter and 6 to exit: 12 cents per share/option in total, multiplied by 10 contracts and 100 share/options per contract, totaling to an amount of USD 120.
  • Under the new pricing structure, you would (as calculated above) save 4 cents per share/option, slashing the total cost to only USD 80 round-trip (for 10 contracts).

Now let's have a look at a different example where a holder of a Platinum account sells an iron condor on the SPX-index:

Old pricing structure

  • Cost to enter the trade: USD 3 per contract per leg × 4 legs = USD 12

  • Cost to exit the trade: Same as entry, USD 12

  • Total cost for a single contract iron condor: USD 12 (entry) + USD 12 (exit) = USD 24

New pricing structure

  • Cost to enter the trade: USD 1 per contract per leg × 4 legs = USD 4

  • Cost to exit the trade: Same as entry, USD 4

  • Total cost for a single contract iron condor: USD 4 (entry) + USD 4 (exit) = USD 8

In this example, the credit earned per contract is USD 9.10. Comparing the costs under the old and new pricing, a Platinum account holder now pays USD 16 less in total to enter and exit a single contract Iron Condor, significantly enhancing the profitability of such trades.

For a Platinum account a lot-size of 10 contracts would not be uncommon and savings on a single trade (of 10 contracts) quickly build up to considerable savings of USD 160 in the above example.

If we take the same iron condor example from above and look at the impact for a VIP account, we get the following outcome: 

Old pricing structure (VIP account)

  • Cost to enter the trade: USD 1.50 per contract per leg × 4 legs = USD 6

  • Cost to exit the trade: Same as entry, USD 6

  • Total cost for a single contract iron condor: USD 6 (entry) + USD 6 (exit) = USD 12

New pricing structure (VIP account)

  • Cost to enter the trade: USD 0.75 per contract per leg × 4 legs = USD 3

  • Cost to exit the trade: Same as entry, USD 3

  • Total cost for a single contract iron condor: USD 3 (entry) + USD 3 (exit) = USD 6

Again, we see a considerable price/commission reduction of 50%!

Key Takeaways:

With the above examples fresh in our minds, these are the key advantages for you as a trader:

  1. Direct cost savings: you'll see a noticeable reduction in your trading costs, making your investments more efficient and cost-effective.

  1. Complex strategies are made more accessible: advanced strategies like Iron Condors and Broken Wing Butterflies (and many other multi-leg strategies) are now within easier reach, thanks to lower commission fees. This opens a new realm of trading opportunities that were previously more expensive.

  1. Boosted profitability: with reduced costs, your profitability could see a significant boost, especially in strategies involving frequent trades or multiple contracts.

  1. Diverse trading tactics: the affordability to execute a variety of strategies allows you to diversify your trading approach, potentially leading to better risk management and improved returns.

  1. Empowering smaller accounts: if you’re working with a smaller account, these reduced rates make options trading more accessible, allowing you to participate more actively in the market.

  1. Increased liquidity opportunities: lower transaction costs could encourage higher trading volumes, potentially resulting in better liquidity for certain options.

  1. Enhanced learning curve: the ability to try different strategies without high commission costs promotes continuous learning and skill development, sharpening your trading acumen.

  1. Advantage for active traders: as an active trader, you'll find these price reductions particularly beneficial, as they allow you to adjust positions frequently at a lower cost.

  1. Stimulating market innovation: the new pricing may lead to novel trading strategies and methods, as traders like yourself find creative ways to maximize returns under this cost structure.

  1. Improved trading experience: overall, these changes are likely to enhance your satisfaction and confidence in your trading platform, knowing that it supports more cost-effective trading strategies. 

In Conclusion: A New Era of Trading Efficiency
 

The introduction of our new pricing structure isn't just a change in numbers; it marks the beginning of a new era in your options trading. By significantly reducing costs, we're not only enhancing the profitability of your trades but also opening the door to a wider array of strategies, especially for those previously deterred by high commission fees. Whether you're a seasoned trader or just starting out, the benefits are clear: more flexibility, increased potential for profit, and a deeper engagement with the market. This change reflects our commitment to your trading success, offering a platform where efficiency and opportunity converge. Embrace this shift as a stepping stone to diversifying your portfolio and realizing your trading aspirations with greater financial freedom.

 
Happy trading!


Disclaimer

Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000
Australia

Contact Saxo

Select region

Australia
Australia

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.