For FX Options, expiry is an automatic process, meaning you do not have to call in to manage the exercise or expiry. If the option is in the-money it will automatically settle in the pre-defined exercise method (described in the next point), or the option will automatically expire (cease to exist) at 10 am Eastern Standard Time (New York cut) on the expiry date.
Please refer to FX Options trading conditions for additional information.
Typically, stock options and contract options are settled physically, while index options are settled by cash. Holders of a long position in American Style options can exercise the option any time prior to expiry, except on the last trading day.
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. This happens instantly.
Clients should always consider closing the option position in the market and acquiring the underlying instrument separately.
Currency options on CME are not allowed to be exercised out of the money, hence these requests will be cancelled once encountered.
Saxo Bank offers two types of Contract Options as defined by the exchange:
- American style Options can be exercised online at any time before the expiry apart from the last trading day.
- European style Options can only be auto-exercised at expiry.
When in-the-money, an American style Contract Options position can be exercised into a specific Futures contract position, which is visible on the Account Summary until expiration. Once the Contract Option expires, the position stays visible on the Account Summary until the settlement day (instrument-specific). A European style Option, when in-the-money, is only exercised at expiry and is cash settled.
The settlement style and expiry details are available in the trade ticket and trading conditions.
For additional information, please refer to the Listed options trading conditions.