Knockout Options: Market Information

Get all the information you need on Knockout Options, including minimum spreads, margin requirements and more.

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Knockout Options
Market Information

Forex

FX pair

Value - one lot

Minimum spread

Max. size

AUD/CAD CAD 1 4.2 590
AUD/JPY Y100 1.6 590
AUD/NZD NZD 1 3 590
AUD/USD USD 1 1.2 730
CAD/JPY Y100 2.3 530
EUR/AUD AUD 1 4.3 360
EUR/CAD CAD 1 3 360
EUR/GBP GBP 1 2.3 450
EUR/JPY Y100 1.4 450
EUR/NZD NZD 1 7.6 360
EUR/USD USD 1 0.9 450
GBP/AUD AUD 1 5.5 300
GBP/CAD CAD 1 7.6 300
GBP/JPY Y100 2.5 300
GBP/NZD NZD 1 8.8 300
GBP/USD USD 1 1.7 380
NOK/JPY Y100 1.6 2710
NZD/JPY Y100 2.3 610
NZD/USD USD 1 2 760
SGD/JPY Y100 4.5 140
USD/CAD CAD 1 2.7 500
USD/JPY Y100 0.9 500
ZAR/JPY Y100 4.9 730

Indices

Index

Value – one point

Minimum spread

Max. size

Wall Street USD 1 2.4 75
Germany 40 EUR 1 1.5 150
Hong Kong 50 HKD 1 22 150
US Tech 100 USD 1 1.2 50
US SP 500 USD 1 0.5 600
Singapore Index SGD 1 1.2 250
Japan 225 Y100 11.6 2,400
UK 100 GBP 1 1.2 250
Australia 200 AUD 1 1.6 400
China A50 USD 1 11 35
US Small Cap 2000 USD 1 0.7 350
France 40 EUR 1 1.5 100

Commodities & Metals

Market

Value – one point

Minimum spread

Max. size

Gold USD 1 0.9 300
Silver USD 1 2.9 62
Platinum USD 1 1.2 16
US Crude Oil USD 1 0.05 75
UK Crude Oil USD 1 5.6 85
Natural Gas USD 1 0.026 85
Coffee C USD 1 1.3 140
Wheat USD 1 1.3 115

Market hours

Knockout Options follow the same trading hours for the underlying market. Full market hours are listed on the market information sheets in the trading platform.

Knockout Option types

There are two types of knockout options, UP KO and DOWN KO, and you can only hold a buying position.

If you anticipate a rise in the price of the underlying asset, you would buy an UP KO position.

If you anticipate a fall in the price of the underlying asset, you would buy a DOWN KO position.

Spreads

Spreads are subject to fluctuation and may change, especially in volatile market conditions. The current spread of a Knockout Option market at a given time can be viewed on the deal ticket in the trading platform. Knockout Option spreads cover the protection of the guaranteed Knockout Level.

Maximum risk and margin requirement

The maximum risk is the maximum amount you can lose on the trade, should the market move against you and your Knockout Level is reached. It is calculated as: Knockout option price x trade size.

The margin requirement for a Knockout Option trade - known as the 'premium required' - is calculated as: Maximum Risk x 1.1. The 1.1 multiplier is to comply with regulations.

Knockout Level

You set your Knockout Level when opening a position. Each market has a minimum distance away from the underlying City Index price, which you will see on the deal ticket.

If your Knockout Level is reached, your position is immediately closed at 0 ensuring that any losses are limited to the amount you were willing to risk when opening the position.

Knockout Option Price

This is the distance between the price of the underlying market at the time of placing the trade and the Knockout Level.

For an UP KO trade: City Index underlying Ask price - Knockout Level

For a DOWN KO trade: Knockout Level - City Index underlying bid price

Knockout Expiry

Knockout Options have an expiry, with the expiry month stated in the name of the market e.g. USD/JPY Feb 23 UP KO (this indicates the Knockout Option expires on the last trading day of February 2023). If a position is still open at the time of the market expiry, City Index will automatically close the position at the mid-price of the Underlying and you will receive the profit or loss on that position.

Overnight financing

Should you hold a position overnight on either an FX or Index market, there will be an overnight financing adjustment. We use swap points to calculate the daily overnight financing adjustment amount for FX pairs, and use the underlying interbank rate (+/- 2.5%) when calculating financing on indices. You can find more details on our charges here.

Knockout Option positions held on Commodities will not be charged overnight financing.

Dividend adjustments

We periodically apply dividend adjustments to Knockout Options Index positions, to take account of the ex-dividend adjustment to the underlying Index. There will be no material impact as, depending on the Knockout Option position held, we will either credit or debit accounts for the dividends paid out on the underlying Index. In the case of ‘UP KO’ Index positions, the dividend adjustment will be credited; in the case of ‘DOWN KO’ Index positions, the dividend adjustment will be debited.