Saxo bank stock options trading

For more information about margin requirement and margin reduction schemes please refer to the sections Margin requirements and Margin reduction schemes below this section.

In case of a margin breach and stop-out is triggered, all option positions will be closed. Details of the margin requirements and allowances for the advanced profile can be seen below: Out-of-the-Money Amount in case of a Call option equals: Max 0, Option Strike Price - Underlying Future Price.

Max 0, Underlying Future Price — Option Strike Price.

Short DTE Jan14 Put 12 Put at 0. Short option positions in American Style Options can be combined with long option positions or covering positions in the underlying deliverable to offset the high risk exposure. As such, the margin charges can be reduced or even waived. We will provide margin reduction on the following position combinations:. A short call position can be offset with a long position in the underlying stock. A spread position allows a long option position to cover for a short option position of an option of the same type, and same underlying deliverable.

When the long option is deeper in the money compared to the short option debit spread , the value of the long option is used up to the value of the short option for coverage with no additional margin to be required. When the short leg is deeper in the money compared to the long leg credit spread , the full value of the long option is used for coverage plus an additional margin equal to the strike difference. To trade out of a spread position, it is recommended to first close the short leg before closing the long leg to avoid the high margin charge of the naked short option position.

However, as the spread margin reservation might not be sufficient to cover the cash amount required to buy back the short option position, a client might find himself locked into a position that he cannot trade out of without additional funds being made available. Since the exposure of the short call and short put are opposite in regard to market direction, only the additional margin of the leg with the highest margin charge is required.

When the call leg of the strangle position is assigned, the client needs to deliver the underlying stock. Vice versa, when the put is assigned, the client needs to take delivery of the underlying Stock. The long Stock can be combined with the remaining call leg of the original strangle, resulting in a covered call. For certain instruments, including Stock Options, we require a margin charge to cover potential losses involved on holding a position in the instrument.

Stock Options are treated as full premium style options. The value from an open long option position will not be available for margin trading other than indicated in the margin reduction schemes. In the following example, a client buys one Apple Inc. Increased due to the price of the option being higher. Unrealised Value of Positions: Reduced by the price of the option.

Not Available as Margin Collateral: Increased due to the new value of the position. A short option position exposes the holder of that position to being assigned to deliver the underlying proceeds when another market participant who holds a long position exercises his option right.

Losses on a short option position can be substantial when the market moves against the position. We will therefore charge premium margin to ensure that sufficient account value is available to close the short position and additional margin to cover overnight shifts in the underlying value.

The premium margin ensures that the short option position can be closed at current market prices and equals the current Ask Price at which the option can be acquired during trading hours. The additional margin serves to cover overnight price changes in the underlying value when the option position cannot be closed because of limited trading hours.

For options on Stocks, the additional margin equals a percentage of the underlying reference value minus a discount for the amount that the option is out-of-the-money.

The margin percentages are set by Saxo Bank and are subject to change. The actual values can vary per option contract and are configurable in the margin profiles. Clients can see the applicable values in the trading conditions of the contract. To get the currency amount involved, the acquired values need to be multiplied with the trading unit shares. The option figure value is shares. The OTM amount is In the account summary, the premium margin is taken out of the position value:.

Corporate Actions on shares can affect any options that are listed on those shares. It might be required to adjust the option contracts in such way that the value of a position in such an option before and after the corporate action remains the same. Corporate Actions include share issues, mergers, conversions, share splits, sell-offs and dividends;. The underlying stock can be subject to corporate actions.

As a result of a corporate action, the Stock option contract might need to be adjusted. Various exchanges have different ways of treating corporate actions. The option exchanges will decide on case by case bases how a corporate action will affect the option contract and positions on the option contracts.

However Saxo Bank reserve the right to close out clients open positions prior to an option adjustment on ex-date if a corporate action adjustment is not supported by Saxo Bank. An example is when an underlying deliverable for the adjusted option contract can be a basket of securities and cash components.

Especially for spin-offs and demergers, the corporate action could result into a basket of deliverables where the original option contract would settle into a number of deliverable components.

The option contracts by themselves do not need to be adjusted in case of this method; instead the underlying deliverable is redefined. To know more about Corporate Action please to go The Options Industry Council online course:. Holders of a long position in American Style options can exercise the option any time prior to expiry.

When the exercise request is entered, the option position is closed at price 0 and a position in the underlying instrument is created at the strike price.

Clients should always consider closing the option position in the market and acquiring the underlying instrument separately. Often the market value of the option exceeds the unrealized profit from opening the underlying position at the strike price.

Exercise requests need to be entered before the exercise cut-off time as specified by Saxo Bank; see these in Contract Options Settlement Conditions. The Exercise cut-off time facing Saxo Bank clients is prior to the cut-off times as defined by the exchange in order to give Saxo Bank and its brokers the time to forward the request to the exchanges.

Plateforme de trading SaxoTraderGO

If exercise requests are entered after the cut off time clients will be rejected and the client must wait until the next day to exercise before the cut off time. On the last trading day, clients will not be able to exercise any position, since the expiry auto-exercise process will manage exercising against the exercise settlement value. Options involve risks and are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses.

It explains the characteristics and risks of exchange- traded options. Spreads, Straddles, and other multiple-leg option strategies can entail substantial transaction costs, including multiple commissions, which may impact any potential return. These are advanced option strategies and often involve greater risk, and more complex risk, than basic options trades. Exercise and assignment of options, particularly American-style, may lead to substantial losses especially if a writer of the option is "uncovered.

In some cases, holders of long OTM options may decide to exercise if very close to the daily settlement underlying price, e. Apple, iPad and iPhone are trademarks of Apple Inc.

Best Options Trading Brokers and Platform | Easy Comparison Tool

App Store is a service mark of Apple Inc. By using our website you agree to our use of cookies in accordance with our cookie policy. Equity Options Trading Conditions. Client margin profiles and option strategies Saxo Bank operates with two margin profiles: Max 0, Option Strike Price - Underlying Future Price Example: Max 0, Underlying Future Price — Option Strike Price Example: Margin reduction schemes Short option positions in American Style Options can be combined with long option positions or covering positions in the underlying deliverable to offset the high risk exposure.

We will provide margin reduction on the following position combinations: Margin requirements For certain instruments, including Stock Options, we require a margin charge to cover potential losses involved on holding a position in the instrument. Short Option Margin A short option position exposes the holder of that position to being assigned to deliver the underlying proceeds when another market participant who holds a long position exercises his option right.

The generic formula for the short option margin charge is: Stock Options For options on Stocks, the additional margin equals a percentage of the underlying reference value minus a discount for the amount that the option is out-of-the-money. The out-of-the-money amount for a call option equals: Max 0, Option Strike — Underlying Spot The out-of-the-money amount for a put option equals: Max 0, Underlying Spot Price — Option Strike To get the currency amount involved, the acquired values need to be multiplied with the trading unit shares.

In the account summary, the premium margin is taken out of the position value: Corporate Actions Corporate Actions on shares can affect any options that are listed on those shares. Dealings between Saxo Bank and the client The underlying stock can be subject to corporate actions. To know more about Corporate Action please to go The Options Industry Council online course: Early Exercise of Options Holders of a long position in American Style options can exercise the option any time prior to expiry.

Exercise Cut-off Exercise requests need to be entered before the exercise cut-off time as specified by Saxo Bank; see these in Contract Options Settlement Conditions. Last Trading day On the last trading day, clients will not be able to exercise any position, since the expiry auto-exercise process will manage exercising against the exercise settlement value. Updated 12 November Stock Options Risk Warning.

Trade responsibly Losses can exceed deposits on margin products. Please ensure you understand the risks. International Risk Warning Disclaimer Legal Terms Privacy Policy Support. Your browser cannot display this website correctly. Our website is optimised to be browsed by a system running iOS 9.

X and on desktop IE 10 or newer. If you are using an older system or browser, the website may look strange. To improve your experience on our site, please update your browser or system. Maximum Strike Long Call - Strike Short Call , 0 Example: