The majority of vanilla FX Options can be executed directly on live price quotes without dealer intervention. For other Currency 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 FX 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 Forex Options?
Forex Options give investors 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 exercise this right is dependent upon the market conditions at the time of Currency Option expiry. Trading FX Options makes it possible to profit when a currency pair moves higher or lower.
At Saxo Bank, Forex Options are traded OTC allowing the investor to choose the expiry date, strike price and 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. Clients will also enjoy the same liquidity benefits experienced through our online Foreign Exchange Spot trading platform.
Online FX Options trading
A Saxo Bank online trading account is a valuable tool for the professional Foreign Exchange trader. Our suite of trading platforms support online trading of Forex Spot, Currency Options and Forward Outrights. For the FX Options trader, Saxo Bank is one of the only online providers that facilitates Currency Options trading on live prices.
For more information, please visit our Forex Options rates and conditions page.