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Stockpair's Pair and Binary Options Trading Rules

Stockpair’s trading rules define the terms and conditions of trading Binary Options and Pair Options on the Stockpair platform. We encourage our clients to familiarise themselves thoroughly with these rules before trading.

General

Binary Options are based on the performance of an underlying asset such as currency, index, stock or commodity, Pair Options are based on the relative performance between two underlying assets in a pair.

Opening a position on options requires choosing a direction the trader predicts will occur in a pre-defined period. In the Binary Options system the direction refers to the price of the single underlying asset. In Pair Options system the direction refers to which asset of the pair will outperform or underperform the other. For each option there are predefined returns according to:

  • The asset and direction that was taken.

  • The time to expiry.

  • The actual performance of the asset.

There are two types of Options: Fixed and Floating (pairs only). They have different rules and valuation. Please take a look at the descriptions below.

Settlement, Returns and Payouts

Options can expire:

  • In the Money (ITM) - When the direction that was picked has indeed happened between the start of the option to its expiry.
  • Out of the Money (OTM) - When the option did not expire In The Money.

When a Binary or Pair Option expires In the Money, you will receive the return that was indicated when the trade was opened (option contract). In that case, the payout is calculated as follows: Initial Amount Invested in the Trade x (1 + % return).
When an option expires Out of the Money, its value is 0, and therefore there will be no payout.

Performance Calculations

The performance of each underlying asset is the difference in percentage between its level at expiry and its level at the start of the option. Please see also the "Underlying assets Start and Expiry Levels" section.
Example:
Google (GOOG) stock’s start level was 400 and the expiry level was 440. The performance of Google stock was +10% (100*[(440/400)-1]) .
Apple (AAPL) stock’s start level was 500 and the expiry level was 495. The performance of Apple stock was -1% (100*[(495/500) -1).
In this example, Google stock outperformed Apple stock during the life of the Pair Option.

Fixed Option

Option Start: Fixed Option start time is at the time the client opens the trade.
Option Expiry: Fixed Option Expiry time is chosen by the client, between 5 minutes and 150 days from the time the client opened the trade.

Expiry Option Start Time Option Expiry Time
In The next 60 minutes or less From the last tick in the system when the position is opened The option start time + the option duration
By the End of Day or longer From the last tick in the system when the position is opened The time the official closing price is published by the exchange in the day the option expires
See the market hours of the exchanges in the Asset Index

Performance: Fixed Option performance(or relative performance in case of pairs) is measured from the time the trade was opened until the time of the Fixed option expiry.
It is possible to close a position prior to expiry: Please check out the "Early Execution of Options" section below. Important: A Fixed Option follows the performance of the underlying asset from the time the client opens the trade to the time of the Fixed Option expiry. The underlying asset performance measurement starts WHEN THE TRADE IS EXECUTED (opened).

Floating Option (pairs only)

Option Start and Expiry: Floating Pair Options start and expiry times are predefined (see table), regardless of the time the client opens the trade.

Option Start Time Option Expiry Time
Daily Beginning of the trading day The time the official closing price is published by the exchange in the day the option expires
Weekly Beginning of the trading week Same as above for the last trading day of the week
Monthly Beginning of the trading month Same as above for the last trading day of the month
See the market hours of the exchanges in the Asset Index

Relative performance: Floating Pair Option relative performance is measured from the option start time to the option expiry time.
Closing the position: It is possible to close a position prior to expiry: Please check out the "Early Execution of Floating Pair Options" section below.
Floating Pair Option Returns: Floating Pair options returns between 5% and 350%. This range may change from time to time. When a Floating Pair Option is deep ITM or OTM, Stockpair will usually be unable to offer trading in the option, and the option will appear "Out of Range".

Important: A Floating Pair Option follows the pair’s underlying stocks performance from the option start time (beginning of the day, week or month) to the option expiry time. Therefore, when a client opens a position of a Floating Pair Option there will usually already be a "gap" between the underlying stocks' performance so a Floating Pair Option on one stock will be In the Money (ITM), while a Floating Pair Option on the other stock will be Out of the Money (OTM).

Early Execution of Options (Closing a Position)

After Opening a trade, the client can choose to close his position at anytime during the Stockpair dealing hours, except during one hour before the end of the trading day in the day the option expires, or in the last 15 minutes before the end of a trading day (see trading hours below) and in special market conditions. In accordance, Fixed Options of 60 minutes or less can not be closed before expiry. Closing an option can be done regardless of it being "In the Money" (ITM) or "Out of the Money" (OTM). During the option life, the closing value of every option position will be continuously quoted and indicated as the "Current Payout" in the opened positions view. When clicking on the "Sell" button, the system will close the position and settle the payout. The closing value of the option trade is calculated so as to reflect the full payout minus the cost of buying an opposite direction option that provides an equal payout at the time of expiration. For instance a short option with a $100 payout would payout $100 minus the cost of a long option with the same expiration and a payout of $100.
Special Notice: when options are deep In the Money or deep Out of the Money, the current payout price might be unfavourable and should be carefully considered by the client.

Stockpair Trading Hours

Stockpair's trading hours are according to the schedule of the exchanges in which the pair's underlying stocks are traded or according to pre-defined hours as appears in the Asset Index. Nonetheless, during the first 15 minutes and last 60 minutes of a trading day, opening and closing of trades is not allowed. A detailed list of the Options’ underlying assets symbols, home exchanges, trading hours and FP symbols are presented in the Asset Index.

The options offered and the manner of calculation may change from time to time based on the Company's sole discretion. The Client undertakes to be continuously updated on the assets and the manner of the aforesaid calculation.

Underlying assets Start and Expiry Levels

For all Options other than Fixed Options of 60 minutes or less:

  • Stocks: the start level is equal to the sum of the ASK, BID and LAST value, divided by three (Bid + Ask + Last)/3, as provided by FP. The expiry is by the Last Price of the day as provided by FP.
  • Currencies: the start and expiry levels are equal to the sum of the ASK value and the BID value, divided by two (Bid + Ask)/2. The result is rounded to 5 digits after the decimal point.
  • Commodities: the start and expiry levels are equal to the sum of the ASK value and the BID value, divided by two (Bid + Ask)/2. as provided by FP .The result is rounded to 5 digits after the decimal point.

For all Fixed Options of 60 minutes or less:

  • Stocks: the start and expiry levels are equal to the sum of the ASK, BID and LAST value, divided by three (Bid + Ask + Last)/3, as provided by FP. The result is rounded to 3 digits after the decimal point.
  • Indices: the start and expiry levels is are equal to the sum of the LAST value as provided by FP.
  • Currencies: the start and expiry levels are equal to the sum of the ASK value and the BID value, divided by two (Bid + Ask)/2. The result is rounded to 5 digits after the decimal point.
  • Commodities: the start and expiry levels are equal to the sum of the ASK value and the BID value, divided by two (Bid + Ask )/2, as provided by FP. The result is rounded to 3 digits after the decimal point.

Trade Volumes and Client's Ethical Trading Guidelines

  • The minimum amount per trade is 20.0 currency units (USD, GBP or EUR).
  • The maximum outstanding trades volume a single client can open at any given time is 3000.0 currency units.
  • The maximum volume of trades of similar positions in the same time is 1200.0 currency units

The above rules might differ for special account plans.

In a case whereby a client violates those rules, either intentionally or unintentionally, the Company reserves the complete and full right to cancel part or all of his trades and return the option trade amount. Cancelling trades and returning funds to the Client’s trading account is done at the Company's discretion. The Company may take action against any Client who has knowingly exploited technical advantages in the system, and ban them permanently from trading with the Company.

Position Close and Market Changes

Trading Rescission

Trading on the Site or on part of it, may be rescinded with no advanced notice. The Client will have no claim or right of indemnification for damages allegedly caused by trading rescission, whether for carried out transactions or for transactions allegedly intended to be carried out.

Dividends and Splits

In a case that during the life of the option, a split, reverse split or a dividend will be distributed by one of the underlying stocks, the price of the option will be adjusted accordingly. The adjustments will be made to the asset price where it is traded due to the aforesaid split, reverse split or dividend.

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