The FX Option Strategies ticket allows you to trade simultaneously up to 10 FX vanilla options from the same ticket. All option legs are executed in one go. The ticket supports all pairs available for FX options.
What are the benefits of the FX Option Strategies ticket?
- Tighter spread than trading legs separately. This will materialize for strategies mixing buy(s) and sell(s) (where Vega netting applies).
- More convenient and controlled execution than trading legs separately
- Delta Exchange capability available and enabling further spread reduction (trade at mid-spot)
- The risk graph provides a visual representation of the pay-off profile at expiry
How to access the Option Strategies ticket?
You can access the FX option strategies ticket in multiple ways:
1. Right-click on an FX instrument from the search, watchlist, screener, positions, orders...
2. Click Strategies when you view an FX option in the option chain
How to use the FX Option Strategies ticket?
- Launch the module, select the account and capture the legs details. The ticket supports from 1 to 10 legs.
- Bid/Ask are available at the leg level and will reflect the spread netting. They are shown in pips for enhanced readability.
- The strategy price is available in the trade button in monetary terms and will be tradable if the trade button has a green square (some dealability criteria apply on notional or delta). Only the right side, corresponding to the direction of the legs as specified, is tradable. The other side is also shown on the left side for transparency purposes. You can, of course, trade the other side by simply flipping all the legs’ directions in one go by clicking on ‘Buy/Sell’.
- Spot Delta exchange allows you to trade simultaneously the option leg(s) as well as the spot position making your strategy Delta neutral. The trade button will reflect the spot position that will be executed at the same time as the options legs. When trading delta exchange, the spot is done at Mid-rate which also constitutes to a tighter spread.
N.B. If the Delta amount is below the minimum spot trade size, no spot position will be executed.
- Bid, Ask, Mid Volatility, Delta (currency 1), Delta %, Gamma (currency 1), Vega (currency 2), Theta (currency 2), premium in monetary term (for the direction specified), Mid forward and expiry value date columns are available and can be customized by simply doing a right click on the header.
- The risk graph provides a visual representation of the Profit and Loss of the strategy at expiry.
How to close an FX Option Strategy?
Once traded, a strategy will be booked as individual option positions with no link between them.
Closing legs separately could involve margin impact and it is therefore recommended to close a strategy by booking a new strategy in the opposite direction.
It can be achieved by:
- Opening the Strategy ticket from an existing position.
- Using the first leg, matching the selected position where the ticket was launched from, as a baseline to rebuild the strategy to close.