Can some one that speaks english tell me if I will be able to exersise bought options with SAXO. I mean, I bought september put ( eur / usd ) strike 1.2300, and it is now is in-the-money. I want to sell eur @ 1.2300 and buy back at what it is now. i do not want to sell the options at its value but I want to contract to be honored. I want to sell euro @ 1.2300 as the contract says.. not sell the option itself. I don't think the folks at saxo understand what I am talking about
Saxo deals in European-style OTC options. They can only be exercised upon the 10am "New York Cut" on the day of expiration. While Euro-style is standard in the industry, it offers the dealer the potential for discount arbitrage on the offset. IOW, you'll have to give-up additional edge if selling before expiration. Best to hedge with a spot-position and let the put lay-off against spot at expiration. I assume the option is deep ITM?
can you recommend me any american style option brokers ? I wasted 1 week of demo with saxo thinking it was american style ? i am loosing it
Ahhh, this was a paper trade. Your best bet is to use a conventional broker who deals in listed futures options. www.interactivebrokers.com offers access to the CME currency options on futures. Markets are typically 5pips wide in EUR/USD and other majors.
this is what the saxo rep e mailed me "Regarding FX options you can close (exercise) them when ever you like. If you test our demo platform this will be clear. Our leverage is 1:100 We also have FX futures. " so what does he mean by that.. ------------ Does IB have demo account. and live price quotes ?
huh, didn't realize they were american-options. OK, then no problem with Saxo. Yes, IB has a demo account and a live, executable feed to the exchanges. The margin req. is lower with Saxo for short premium, but I don't know if that's of any interest to you.
"didn't realize they were american-options" so you think or do you get the impression that thats what they are saying ? ..that this is american style ? is that what you think they are saying these loosers do not answer phones.. I like their platform. which IB plateform should I get IB webtrader ? or individual ? is vanilla option same as american ? thanx by the way
Effectively what you are trying to do is equivalent to selling your in the money options(of course american style). So next time you will be better off by simply selling them.
One thing to keep in mind with Saxo is their risk-system on short premium. They system is rudimentary at best at dealing with complex positions and risk-dissection. They do not use SPAN or any VaR methodology. Something to keep in mind when the haircut doubles on Friday's NY cut. They charge short premium at notional haircut which can be a problem if you trade options aggressively and use short premium strategies. A friend of mine saw his margin req quadruple into the Friday cut and the system liquidated all trades in the account, even spot positions. I believe he had something like 40 positions running... liquidation cost him >50k.