Options are now available in the SabioTrade Sim Traderoom as a simulated trading instrument. You can find them alongside other available instruments and explore them within the simulated trading environment.
With an option, you select an available asset, strike price, direction, and expiration. The Sim Traderoom then shows the simulated profit for your selection. Simulated profit can depend on factors such as the distance between the strike price and the current market price, the time remaining until expiration, and other system parameters. The simulated profit can change as market conditions change.
All Options activity in the SabioTrade Sim Traderoom takes place in a simulated environment. It does not involve buying or selling the underlying asset in live markets, and simulated results do not represent actual trading results.
What are Options?
An option is a time-limited simulated trade based on the price of an underlying asset, such as a currency pair, commodity, cryptocurrency, or another asset available in the Sim Traderoom.
Instead of buying or selling the underlying asset, you make a simulated prediction about whether its price will be above or below a selected strike price when the option expires.
For example, you may expect EUR/USD to be above a selected strike price when the option expires. You can then press the “Higher” button to open the position.
The main elements of an option are:
- Underlying asset: The market or asset the option is based on.
- Strike price: The price reference used to determine the option’s outcome at expiration.
- Expiration: The time when the option ends.
- Position: “Higher” or “Lower,” depending on your price direction.
- Potential profit: The potential simulated profit based on the selected position.
All Options trading through SabioTrade takes place in a simulated trading environment.
Which assets are available?
Options are available on a selection of assets in the Sim Traderoom.
| Asset | Type |
| EUR/USD | Forex |
| USD/JPY | Forex |
| GBP/USD | Forex |
| USD/CHF | Forex |
| AUD/USD | Forex |
| USD/CAD | Forex |
| NZD/USD | Forex |
| Gold | Commodity |
| Silver | Commodity |
| BTC | Cryptocurrency |
| ETH | Cryptocurrency |
The available assets may change. Check the Sim Traderoom for the current list.
How do options work?
Let’s look at a simple example.
Imagine EUR/USD is trading at 1.1000. You select the 5-minute expiration, and the Sim Traderoom shows the strike prices available for it. You choose a strike price of 1.1020. You expect EUR/USD to be above 1.1020 when the option expires, so you press the “Higher” button to open a position with a $100 simulated trade amount.
Suppose the Sim Traderoom shows a 200% rate, meaning a potential simulated profit of 200% for the selected option.
If the option finishes in the expected direction at expiration, the total simulated result would be $300: the original $100 simulated trade amount plus $200 in simulated profit. If the option does not finish in the expected direction, the $100 simulated trade amount is lost.
These figures are examples only. Actual values shown in the Sim Traderoom depend on the selected asset, expiration, strike price, and current market conditions.
Expiration periods
Expiration determines when an option ends and its simulated result is determined. At the moment, the following expirations are available: 5 minutes and 15 minutes.
Option expirations are tied to the platform’s time, not to the moment you open a position. Expiration periods run back to back: each new period starts when the previous one ends, and every option opened during a period ends at the end of that same period. This means you can open an option at almost any point before its expiration, but the time you wait depends on when you open it. With a 5-minute expiration, you may wait the full 5 minutes or only a few minutes. Once an option is open, its expiration cannot be changed or extended.
The simulated profit and other values can change while the expiration period is running, so check the information shown in the Sim Traderoom when you open the option.
The opportunity to open an option for a given expiration ends 30 seconds before its expiration. For example, if both a 5-minute option and a 15-minute option expire at 10:00, the trading window for the 5-minute option runs from 9:55:00 to 9:59:30, while the 15-minute option runs from 9:45:00 to 9:59:30. Between 9:55:00 and 9:59:30, both options have the same expiration time, but the available strike prices are different for each expiration.
Expiration is an important part of the option calculation. The time remaining can affect the simulated profit and the current value of an open position.
Always check the expiration shown in the Sim Traderoom before opening an option.
Maximum exposure
The maximum exposure for options is 0.5% of the available balance per expiration. This limit applies to the combined exposure of all options opened during the same expiration, not to each individual option.
For example, if you open an option using 0.4% of your available balance during the 5-minute expiration, you can open another option during that same expiration using no more than the remaining 0.1% of your available balance.
The 0.5% limit is applied separately to each expiration.
Why are there sometimes more strike prices on one side?
Strike prices are calculated at the beginning of each expiration period. They are then fixed for that expiration period.
The system initially generates strike prices both above and below the current market price. The number of strikes and the distance between them are determined by the system’s parameters.
The market price, however, continues to move after the strike prices have been created.
For example, the system could initially generate seven strike prices above and seven below the current market price. If the market then moves significantly higher, there could be only three available strikes above the new market price and 11 below it.
This is why the number of available strike prices can sometimes look uneven.
You may also see no available strikes in one direction. This does not mean the strike prices are moving with the market. The strike prices remain fixed for that expiration period.
Why can Higher or Lower sometimes be unavailable?
Higher and Lower availability can change dynamically. There are two main reasons why one side may be unavailable.
No available strike prices
Market movement can result in no available strike prices in a particular direction. This can prevent certain positions from being opened.
Position balancing
The Sim Traderoom also manages the balance between Higher and Lower positions for each asset and expiration.
If too many traders open positions in the same direction, the system may temporarily restrict additional positions in that direction.
For example, if many traders open Higher positions on EUR/USD for the same expiration, Higher availability may temporarily become unavailable. If trading activity changes, Higher availability may become available again.
This means that Higher and Lower availability can change based on current platform activity and the system’s risk-management mechanisms.
How is potential simulated profit calculated?
Potential simulated profit depends on several factors, including the current market price, the selected strike price, the time remaining until expiration, and expected volatility.
In general, a strike price closer to the current market price requires a smaller price movement to finish on the expected side. A strike farther from the current price requires a larger movement.
The Sim Traderoom updates the displayed potential profit as market conditions and the remaining time change. Once you open an option, the potential simulated profit at expiration is fixed for that option. However, if you close the position before expiration, the early-closing value may change dynamically based on current market conditions and the system’s calculation parameters.
SabioTrade uses a modified version of the Black-Scholes model, together with proprietary parameters and internal risk-management settings, to calculate the potential simulated profit.
The calculation can take into account factors such as:
- Current market price
- Distance between the market price and strike price
- Time remaining until expiration
- Expected volatility
- Internal risk-management parameters
The exact formula, parameters, and exposure settings used by the system are proprietary and are not publicly disclosed.
How can the displayed result change?
Strike prices remain fixed during an expiration period, but the displayed result for each available strike can change as market conditions change.
The Sim Traderoom continuously recalculates the displayed value based on factors such as the current market price, the distance to the selected strike, and the time remaining until expiration.
For example, the same strike may show a different value later in the same expiration period. However, once you open an option, the simulated profit shown at the time of entry is fixed for that option.
Why can different strike prices show the same result?
You may sometimes see the same displayed result for different strike prices. This does not necessarily mean that the options have exactly the same underlying calculation.
This can happen because:
- The calculated values are very close to each other.
- The Sim Traderoom displays rounded percentages. For example, calculated values of 270.2% and 270.4% could both be displayed as 270%.
- Maximum displayed limits may apply. For example, if the maximum displayed value is 300%, different calculations above that level may all appear as 300%.
The displayed values therefore do not mean that different strike prices have identical underlying calculations or risk characteristics.
Can you close an option before expiration?
Yes. The button to close the option is available throughout the expiration period. The Sim Traderoom automatically calculates the current value of the position while the option is open.
This value is calculated dynamically and can depend on factors such as:
- Current market price
- Selected strike price
- Time remaining until expiration
- Other formulas and parameters used by the system
The value available when closing early may be different from the result that would apply if the option remained open until expiration.
For example, imagine a simulated trade amount of $100 with a 90% displayed simulated profit.
If the option finishes in the expected direction at expiration, the total simulated result would be $190. If you close the position before expiration, the current value could instead be:
- $120, resulting in a $20 simulated profit
- $60, resulting in a $40 simulated loss
- $0, in certain circumstances
These are illustrative examples only. The actual early-closing value is calculated automatically by the Sim Traderoom and can change during the expiration period based on the current market conditions and the formulas and parameters used by the system.
What should you check before opening a position?
Before opening an options position, review the information available in the Sim Traderoom.
Pay attention to:
- Current market price
- Available strike prices
- Potential simulated profit
- Simulated trade amount
- Applicable trading conditions
Also make sure your total options exposure for the selected expiration stays within the 0.5% maximum exposure limit.
Strike prices, displayed simulated profit, expiration availability, and Higher/Lower availability can change based on market conditions and current platform activity.
How do SabioTrade rules apply to Options?
Options are subject to the applicable SabioTrade account rules. In short:
- Profit Target: Options trading can contribute to the Profit Target during the Evaluation.
- Open positions and account balance: When you open an option, the simulated trade amount is deducted from your balance right away and affects your account equity while the option is open. If the option finishes in the expected direction, the amount is credited back together with the simulated profit. If the option does not, the simulated trade amount is not returned.
- Daily Loss Limit: Your account must stay within the applicable Daily Loss Limit. Simulated losses from Options count toward this limit, and the simulated trade amount of an open option counts as soon as the option is opened. If you are close to the limit, opening an option can breach it.
- Maximum Trailing Drawdown: Your account must stay within the Maximum Trailing Drawdown. The drawdown is based on the account’s Highwater Mark. The simulated trade amount of an open option also reduces your equity, so opening an option when you are close to this limit can breach it.
- Consistency Rule: Option results are included when calculating the Consistency Rule, where applicable.
- Trading restrictions: You must follow all applicable trading conditions and prohibited trading practices. Higher and Lower availability can also change dynamically based on market conditions and the platform’s risk-management mechanisms.
- Evaluation Account: Reaching the Profit Target does not automatically mean the Evaluation is passed. You must meet all applicable rules and requirements.
- Reward Account: After successfully completing the Evaluation and receiving a Reward Account, the applicable account rules continue to apply to your simulated trading activity.
- Performance Reward: Any Performance Reward is subject to the applicable SabioTrade rules and requirements.
Important: The exact limits and requirements depend on your account and plan. Always check the current SabioTrade rules before trading.
Explore Options in the Sim Traderoom
Options are now available in the SabioTrade Sim Traderoom.
You can explore available assets, review strike prices, check displayed simulated profit and potential results, and view available expiration periods directly in the trading interface.
The Sim Traderoom also shows the current early-closing value for open positions when this feature is available. This allows you to review the current value of an open simulated position before expiration.
You can explore the available Options instruments and trading conditions directly in the SabioTrade Sim Traderoom.
Important note
Options can involve significant risk in live markets. The SabioTrade offering described in this article is provided in a simulated trading environment. Simulated results do not represent actual trading results and are not a guarantee of future performance.
Displayed simulated profit, strike availability, Higher/Lower availability, expiration availability, and early-closing values may change dynamically.
The examples in this article are for educational purposes only. Actual values, limits, and trading conditions are shown in the Sim Traderoom and may vary.