Forex Options Trading Rates

Forex Options Trading Conditions

Target Bid/Ask Spreads

These are the target bid/ask price spreads used in normal market conditions. In quiet market conditions, the spread may be even narrower but in periods of volatile markets, the spread may be increased and auto-execution disabled.

Ticket Fees

For trades below the Ticket Fee Threshold, a small ticket fee of USD 10 is added to the trade to cover administration costs.

The margins for Forex options are also subject to a volatility factor that may increase the margin requirements. This factor will be more prominent the farther out the option's expiry date.

Forex Options Margin Requirements

Margin requirements for Forex Option positions take into account changes in:

• Volatility
• Spot price of the underlying asset
• Open positions (that effectively reduce the risk associated with your Options positions)

Margin Calculations

Margin requirements for Forex options consist of a:

• Delta Margin which is related to the exposure due to changes in the spot market
• Vega Margin which is related to changes in the volatility of the underlying spot Forex cross

This margin calculation system nets open Spot positions against Options, resulting in generally lower margin requirements.

Exercise procedure

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. This 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 exercise, the exercised position will be netted out on the following day.

Δ