The majority of vanilla Options can be executed directly on live price quotes without dealer intervention. For other Options – including exotic currencies and multiple leg Options, the platform offers good price indications with trades quoted by a dealer on request.
Saxo Bank supports New York cut Forex Options which expire at 10:00 New York time. For Options that are ‘in the money’ at expiry, Saxo Bank automatically exercises the Option and converts it to a spot position without the need for any intervention.
What are FX Options?
A Forex Option gives an investor the right, but not the obligation, to either buy (Call Option) or sell (Put Option) a certain currency pair at a specified price (known as the strike) on a specified date (the expiry date). For this right to buy or sell the underlying asset, a premium is paid upfront to the seller of the Option. Whether one chooses to use, or exercise, this right is dependent upon the market conditions at the time the Option expires. Trading Forex Options makes it possible to profit when a currency pair moves higher or lower.
At Saxo Bank, Forex Options are traded OTC (Over the Counter) allowing the investor to choose the expiry date, strike price and amount (size of the trade). This differs from more restrictive exchange-traded Options with set expiry dates and amounts. FX Options can be traded whenever the currency markets are open from New Zealand Opening on Monday until New York Closing on Friday with the same benefits of Saxo Bank liquidity as with its online FX Spot trading platform.
Trade FX Options online
A Saxo Bank online trading account is an essential tool for the professional FX trader. Saxo Bank’s trading platforms support online trading of FX Spot, Options and Forward Outrights. For the FX Options trader, Saxo Bank is one of the only online providers that facilitates Options trading on live prices.