Forex Options

Bid/Ask Spreads and Autoexecution

Saxo Bank is a global leader in Forex Options trading. We are able to provide streaming prices for most of the popular currency pairs with larger strike ranges and longer maturities than others. This means clients have direct access to trade Forex Options on live prices without dealer intervention. Except on low-value trades, there are no commissions on trading Forex Options, only the difference in the spread. Since Saxo Bank always quotes both the bid and ask price, the current spread is always visible to the client.

The spreads on Forex Options may change from option to option depending on several factors such as time to maturity and the volatility of the underlying Forex spot rate (Delta). The full list of indicative spreads can be found in the SaxoTrader and SaxoWebTrader platforms under Trading Conditions.

Read more about Saxo Bank’s volatility-based Options pricing.

As Saxo Bank continues to increase its profile and participation in the direct interdealer market, these benefits will be passed on to all of our clients in the form of smaller spreads, higher liquidity and more currency crosses to choose from.

Exercise method

Forex Options that are 'in the money' are automatically exercised at 10:00 New York time (New York cut) on the day of expiry where they are converted to a spot position. Up to one hour before exercise the trader may choose between receiving and keeping the spot position (“spot”) or having Saxo Bank automatically exit the spot position at mid-price of the spread at the time of exercise (“cash”).

Cash exercise method is available on short and long positions, on all Forex Options and automatic exit of the spot position is available at mid-price of the spread – also in volatile market conditions.

If spot exercise method is chosen, the spot position is subject to the usual profit/loss if the spot price moves from the exercise price. If you already have an offsetting position at the time of exercise, the exercised position will be netted out on the following day.

Commission on Low-Value Trades

For trades below the Commission Threshold, a small ticket fee of USD 10 is added to the trade to cover administration costs. Commission Threshold per currency pair is the same as for FX Spot, and can be seen in the Forex Rates and Conditions page.