Margin Trading

Client Margin Profiles

With regards to Contract Options trading, Saxo Capital Markets operates with two clients’ margin profiles:

Basic profile (default) enables clients to buy (long) Contract Options calls and puts only.

Advanced profile (per request) for individually assessed clients, enables clients to do the same as the basic profile as well as to write (sell short) Options and receive margin benefits on Options’ strategies (combination of Options and/or underlying positions).

Margin and Stop Out

When trading Contract Options with Saxo Capital Markets, one might be able to cover potential losses involved in holding a position in the underlying instrument. That is the case when selling Contract Options short.

In case of a margin breach and stop-out is triggered, all Options positions will be closed. If a stop-out is triggered by trading other margin products (such as FX, CFDs, Futures), long Contract Options positions will also be included in the stop-out.

Ensure you fully understand the risks involved and seek independent advice if necessary.

Trading Short - Margin

A short Option position exposes its holder to the risk of being assigned to deliver the underlying asset, when another market participant who holds a long position exercises his Option’s right.

Losses on a short Option position can be substantial when the market moves against the position.

Saxo Capital Markets will charge premium margin to ensure sufficient account value to be available to close the short position and additional margin to cover overnight shifts in the underlying value.

The margin charges are monitored in real-time for changes in market values and a stop-out can be triggered when the total margin charge for all margined positions exceeds the client’s margin call profile.

The generic formula for the short option margin charge is:

Short Option Margin = Premium Margin + Additional Margin

Risk Warning

Trading risks are magnified by leverage – losses can exceed your deposits. Trade only after you have acknowledged and accepted the risks. You should carefully consider whether trading in leveraged products is appropriate for you based on your financial circumstances. Please consider our Risk Warning and General Business Terms before trading with us.