Forex Options Prices

Vanilla Options prices


Award winning pricing

Being a global market leader in the OTC foreign exchange Options trading, Saxo Bank provides you with access to liquidity and streaming prices. Saxo Bank option prices are shown on your trading platforms as dynamic Bid/Ask spreads. The options’ bid/ask spreads are of variable nature and depending on liquidity and conditions. 

Samples of current live FX Vanilla Options spreads, updated every hour are available under 'Spreads'

Pricing model

The pricing model Saxo Bank applies for FX Vanilla Options is based on an implied volatility surface for the Black-Scholes model. The price is calculated in Pip terms of the 2nd currency. Expiry up to 1 year.  

Spreads are variable depending on available liquidity and market conditions. Prices are shown as dynamic bid/ask spreads.

Spreads

The quoted FX Options spreads are for 30 day at-the-money options. Spreads for other strikes and maturities will vary.

See all FX options spreads with live updates

Saxo Bank reserves the right to apply different spreads for notional amounts exceeding market standard or for customers requiring a specific level of service.

Trade Size & Liquidity

Maximum streaming notional amount is 25 million units of base currency; with a minimum ticket size of 10,000 on currency pairs; and for precious metals 10 oz (Gold) and 100 oz (Silver). 
Notional amounts over maximum streaming amount are request for quote (RFQ).

Ticket fee on small trades

Small trade sizes incur a 'Minimum Ticket fee' of USD10 or equivalent in another currency. A small trade that attracts a Minimum Ticket fee is any trade below the 'Ticket Fee Threshold' listed below.

FX Vanilla Option Ticket Fee Threshold
XAUUSD 50
XAGUSD 5,000
AUDSGD, EURCZK, EURHUF, EURPLN, EURTRY, EURUSD, GBPAUD, GBPCAD,
GBPCHF, GBPJPY, GBPUSD, USDCAD, USDCHF, USDHUF, USDILS, USDJPY,
USDMXN, USDPLN, USDSGD, USDTRY, USDZAR, USDRUB, EURRUB
50,000
AUDJPY, AUDNZD, AUDUSD, CADJPY, CHFJPY, EURAUD, EURCAD,
EURCHF, EURGBP, EURJPY, EURNOK, EURNZD,
EURSEK, NZDJPY, NZDUSD, USDNOK, USDSEK
100,000
NOKSEK 1,000,000

Updated 24 June 2016


Touch Options Prices

Pricing Model

When Trading Touch Options the holder (buyer) of an option (long) pays a premium and possibly receives a payout. The seller (writer) of an option (short) receives the premium and possibly has to pay the payout.  The pricing model Saxo Bank uses is similar to the one we apply to Vanilla Options (based on Black-Scholes model), with the price being expressed as a percentage of the payout in the first currency. Spreads vary depending on available liquidity and market conditions.

No Commission

When Trading Touch Options you either pay the Premium (long positions) or receive it (short positions). No other commissions apply.

Trade size & Liquidity

Amount is expressed as the potential payout. Maximum streaming notional amount is 25,000 units of base currency, with a minimum ticket size of 100 units. The price is expressed as a percentage of the payout in the first currency, with tradable tenors from 1 day to 12 months. Notional amounts over maximum streaming amount are request for quote (RFQ).

Dynamic Bid/Ask spread

FX Options are available on live streaming bid and ask prices. Spreads vary depending on available liquidity and market conditions. The pricing displayed on your trading platform is dynamic bid/ask spreads, quoted as a percentage of the potential payout, reflecting the market's expectation of the probability that the spot rate will reach (or not reach) the trigger (or barrier) level prior to expiry. 

Pricing / Premium

The price of a Touch Option is called the Premium and is expressed as a percentage (%) of the potential payout. For instance, for a notional size of 1,000 and a price of 10%, the Premium will be 100 units of base currency and the Payout will be 1,000 units of base currency. For long positions you pay the premium and for short positions you receive the premium.

Example:

  • You are looking for a potential payout of EUR 1,000 if EURUSD reaches 1.1500 within two weeks. The price of the One Touch Option is 20%.
  • You the pay EUR 200 (EUR 1,000 x 20%) for the option.
  • If the EURUSD spot price reaches 1.15000 before it expires you receive the pay-out of EUR 1,000 
    (net profit of EUR 800).
  • If it doesn't reach the trigger level of 1.15000 your loss on the trade is the initial premium you paid for 
    the option (EUR 200).
Premium

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.

Updated 30 Oct, 2014

Award winning pricing

Being a global market leader in the OTC foreign exchange Options trading, Saxo Bank provides you with access to liquidity and streaming prices. Saxo Bank option prices are shown on your trading platforms as dynamic Bid/Ask spreads. The options’ bid/ask spreads are of variable nature and depending on liquidity and conditions. 

Samples of current live FX Vanilla Options spreads, updated every hour are available under 'Spreads'

Pricing model

The pricing model Saxo Bank applies for FX Vanilla Options is based on an implied volatility surface for the Black-Scholes model. The price is calculated in Pip terms of the 2nd currency. Expiry up to 1 year.  

Spreads are variable depending on available liquidity and market conditions. Prices are shown as dynamic bid/ask spreads.

No Commission

When Trading Touch Options you either pay the Premium (long positions) or receive it (short positions). No other commissions apply.

Dynamic Bid/Ask spread

FX Options are available on live streaming bid and ask prices. Spreads vary depending on available liquidity and market conditions. The pricing displayed on your trading platform is dynamic bid/ask spreads, quoted as a percentage of the potential payout, reflecting the market's expectation of the probability that the spot rate will reach (or not reach) the trigger (or barrier) level prior to expiry. 

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. 

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