Bid/Ask Spreads and Autoexecution
Saxo Bank is a global leader in Forex Vanilla 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 you have direct access to trade Forex Vanilla Options on live prices without dealer intervention. Except on low-value trades, there are no commissions on trading Forex Vanilla 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 you.
Exercise method
Forex Vanilla 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 you 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 Vanilla Options and automatic exit of the spot position is available at mid-price of the spread – also in volatile market conditions.
Change of an excercise method is possible up to 1 hour prior to the Options expiry.
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.