Key Information Documents

Key information document (FX Options)

FX Vanilla Options

Comissions

Small trade sizes incur a ‘Minimum Ticket fee’ of USD10 or equivalent in another currency. A small trade that attracts a Minimum Ticket fee is any trade below the ‘Ticket Fee Threshold’ listed below.
FX Vanila Options Ticket Fee Threshold.

Margin Policy

While the exposure is rather straightforwardly given as the notional amount on an FX spot or forward position, this is not the case with FX options. You will not be able to just use the notional amount on a complicated option strategy. On many types of option strategies (the ones with unlimited risk), the FX Expiry Margin (which is the FX Options margin model) uses the margin rate on the underlying currency pair to calculate the margin requirement. So which margin rate should now be used for the margin calculation of this particular currency pair, when we do not have a single fixed margin rate considering it now depends on the level of exposure? The answer to this question is the margin rate based on the highest potential exposure across your FX and FX option positions in the currency pair. The margin requirement on FX Options is calculated per currency pair, and per maturity date. There is a ceiling to the margin requirement that is the highest potential exposure across the FX Options and FX positions multiplied by the prevailing FX (spot) margin requirement. This calculation also takes into account potential netting between FX Options and FX spot and forward positions. On limited risk strategies, e.g. a short call spread, the margin requirement on an FX Options portfolio is calculated as the maximum future loss.

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Expiration Style

ELANA Trading offers European style FX Vanilla Options, that is, option will be exercised or expire only at the expiry date and cut at 10:00 Eastern Standard Time (New York cut). Forex Vanilla Options that are ‘in the money’ are automatically exercised on the day of expiry. By default they are converted to a spot position. Up until one hour before exercise you may choose between receiving the spot position (‘spot’) or having ELANA Trading automatically exit the spot position at mid-price of the spread at the time of exercise (‘cash’). There is not limit to the number of times you may change the exercise method.

Stock Options

Commissions

When trading stock options, there are no minimum ticket feed. Each trade is subjet to a flat-rate fee. One contract is 100 shares

Margin

When buying an option, the buyer must have in his account only an amount equal to the premium of the option itself. On the expity date, and in particular two hours (21:00 Bulgarian time) before the closing of the stock exchange in the USA, the platform begins to calculate whether the client has sufficient funds in his account to cover the risk of delivery of the underlying asset. The risk management department calculates different risk scenarios for each specific option. Based on the different scenarios, it is estimated how much money the client must have in his account in order to exercise the option. The client can see the various scenarios in the platform in the menu “Closeout Report”. These scenarios are visible in the platform only on the day of maturity, as they are dynamic and the required margin depends on the current market situation.

Expiry and automatic exercise

All exchange traded options are exercised automatically when they mature. If the option is “in the money”, it will be exercised. If it is “out of money”, it will expire without value. The option will be exercised only if the client has sufficient funds to cover the risk of delivery of the underlying asset. Otherwise the option will be closed automatically.

Early Exercise of Options

Holders of a long position in American Style options can exercise the option any time prior to expiry. To exercise a long option position, an exercise request can be entered in the trading application; in the “Account Summary”. When exercising an option, a commission is charged for buying the stocks. No commissions are paid for the exercise itself. 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.

Writing (sell short) options

By default,you will not be enabled to short sell stock options short. Short selling of Contract Options is allowed for individually assessed clients who have obtained an advanced margin profile. Please contact us for more information

CFD Options

When trading CFD options, you don’t pay any commission per contract

Strikes, Maturities, Expiry and Settlement

Available strikes are +/- 25% from “at the money” and will be reset daily, with up to 90 days of maturity. All expiries are cash settled, based on the underlying settlement price. All CFD options are European style options, so it is only possible to exercise at the expiry.

Holding Fees

Holding fees on long option position (all maturities) will be applied when positions are held overnight. The daily holding fee is 1.10 per million (notional value) in the contract’s trading currency.
Holding fee per day = nominal value/1 000 000 * 1.1

Futures Contract Options

Comissions

Comissions are for each options contract traded (both for sell and buy contracts). There is no minimum comission.

Exercise and Settlement

ELANA Trading 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. 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).
• European style Options can only be auto-exercised at expiry. A European style Option, when in-the-money, is only exercised at expiry and is cash settled.

Expiry and Auto Exercise

When trading contract options, all options positions are subject to an auto exercise procedure at expiry as follows:

• All long positions on in-the-money Options are assumed to be exercised
• All short positions on in-the-money Options are assumed to be assigned
• All positions on out-of-the-money Options are abandoned

A Call Option is in-the-money when the strike price is below the market price of the underlying asset. A Put Option is in-the-money when the strike price is above the market price of the underlying asset. Abandonment of in-the-money positions is not supported. Thus, clients should close their Option positions prior to expiry.

Early Exercise of Options

Holders of a long position in American Style options can exercise the option any time prior to expiry. To exercise a long option position, an exercise request can be entered in the trading application; in the “Account Summary”. When exercising an option, a commission is charged for buying the underlying future contract. No commission are is for the exercise itself. On the last trading day, clients will not be able to exercise any option, since the expiry auto-exercise process will manage exercising against the exercise settlement value.

Short Trade on Contract Options

By default,you will not be enabled to trade Contract Options short. Short selling of Contract Options is allowed for individually assessed clients who have obtained an advanced margin profile. Please contact us for more information.

Deactivation of the underlying asset

If the Exchange deactivates the underlying asset, ELANA Trading will notify its clients and remove the related positions from the clients trading accounts.

Carrying Cost on Short Positions in Listed Options with maturity below 120 days

The overnight Carrying Cost on Short positions in Listed Options with maturity below 120 days will be calculated on the basis of the daily margin requirement.
Carrying Cost = Margin requirement * Holding time * (Relevant Interbank rate + Markup) / (365 or 360 days)
The fee will be calculated on a daily base and charged end-of-month.

Holding Fee on Short Positions in Listed Options with maturity beyond 120 days

The Holding Fee varies depending on the underlying asset class (Category) and will only apply to bought options with maturity beyond 120 days.
The fee will be calculated based on the below schedule and charged end-of-month.
Bought Options daily holding fees per million (Nominal Value)

Holding Fee per day = Nominal Value / 1 000 000 * Underlying Category Fee

FIFO (First-In-First-Out)

When netting open FX positions Saxo uses FIFO (First-In-First-Out) rules, which means that the first position that you open is the first position to be closed. This is provided that the positions are on the same account and that none of the positions have related orders attached.
Example: You are trading EURUSD and have opened the following positions:

The first long position 1) will net out with the first short position 3), the second long position 2) will net out with half of the second short position 4), leaving only one short position of 1M EURUSD at the end of the trading day.