Value - one lot
Value – one point
|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|
|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
Value – one point
|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|
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 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.
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 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.
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.
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.