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 under volatile or illiquid markets.

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 applies 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.

Trades cannot be executed below the minimum trade size. Minimum trade sizes are as follows:

  • XAUUSD: 10 Oz
  • XAGUSD: 100 Oz
  • NOKSEK: 50,000 NOK
  • All other currency pairs: 10,000 units of base currency

See minimum trade sizes, commission thresholds and commissions for all FX options here.

Request for Quote (RFQ) on amounts above the maximum streaming amount (currently 25,000,000 units of base currency) will be executed manually by the FX trading desk.

Note. Maximum streaming amounts are subject to change without prior notice.

Small trade sizes incur a minimum ticket fee of 10 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.

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