Saxo Bank’s multilevel special investment has issued information to White Label (WL) partners.
If the final white label customers want to sell a short stock sale-whether for a covered call, naked short or as part of a strategic choice-WL must first allow them to Saxotools by applying the “Expert” profile.
SAXO applies changes to allow all customers to be short shares from default, provided they hold the underlying shares in their account (that is, starting a covered call). There is no longer a need to modify CO trading profile to open a covered call.
However, if WL customers want to open naked short options or use selection strategies, the CO trading profile must still be set to “experts”.
Customers trying to close their position while holding a covered call will receive the following error message, demanding them to close the short selection leg first:
“Closing the underlying position used in a covered call strategy is not allowed for high risk rating security. Close short call options first.”
This measure prevents customers with covered calls from ending up with a naked short choice, closing only the position of the stock.