Saxo offers trading in two types of FX OTC options:
1. FX Vanilla Options
2. FX Touch Options (only for professional classified clients)
FX Options can be traded from the Trade Ticket or from Option Chain.
FX Vanilla Options
A Vanilla Option is a derivative financial instrument that gives the buyer the right, but not the obligation, to either buy (Call) or sell (put) a predefined notional amount of a currency cross at a pre-defined price (Strike price) at a predefined date in the future (Expiry date). The seller of the option has a corresponding obligation to fulfill the transaction should the buyer decide to exercise his right.
FX Touch Options (Touch Options are available for elective professional clients only).
A Touch option is a type of exotic option that gives the buyer a pre-determined payout either once a spot price of a currency cross reaches or surpasses a predetermined barrier (Trigger price) – One Touch or if spot never reaches the trigger level before the expiry – No Touch. These types of options allow you to set the Trigger price, the time to expiration and the payout to be received.
Please note that short positions in options carry more risk than long positions as the potential loss could amount to the total payout, whereas in the case of a long position, the potential loss is limited to the premium paid.