MT305 — Foreign Currency Option Confirmation
The confirmation of a vanilla FX option (call or put, European or American style). The economic parameters of an OTC option contract between buyer and seller after a verbal agreement on the OTC FX market.
Purpose
MT305 confirms a vanilla FX option deal: the option buyer pays a premium to the seller in exchange for the right (without obligation) to buy (call) or sell (put) one currency against another at a fixed price (strike), on a defined expiry date or during a period (American style).
Like MT300, MT305 is sent by each counterparty after a verbal agreement on the OTC FX platform (voice, RFQ platform like FXall). Matching happens in the back-office, sometimes with a third-party CCP (LCH ForexClear for cleared FX options since 2020).
Tag structure
MT305 is a flat message with numeric tags. No sequences as in MT300: the option's economic parameters are described by about fifty optional tags, including about twenty mandatory tags for basic matching.
Mandatory tags
| Tag | Name | Usage |
|---|---|---|
:20: | Sender's Reference | Unique option reference on the sender side (16 chars). |
:22A: | Type of Operation | NEWT, AMND, CANC. |
:22C: | Common Reference | Reference shared by both counterparties for matching. |
:82A: | Party A | Sender BIC. |
:87A: | Party B | Counterparty BIC. |
:17O: | Open / Closed | Y (open) / N (closed) — flags whether the trade opens a new position or closes an existing one. |
:32B: | Underlying Currency / Amount | Currency and notional of the option's underlying. |
:30T: | Trade Date | Trade date. |
:30X: | Expiry Date | Option expiry date. |
:30P: | Settlement Date | Premium settlement date. |
:36: | Strike Price | Exercise price (FX rate). |
:39M: | Premium Currency | Premium currency. |
:37K: | Premium Amount | Premium amount paid by the buyer. |
:30V: | Premium Payment Date | Effective premium payment date (typical T+2 trade date). |
:12B: | Type of Settlement | OPTI (option style indicator) — DELIV (physical) / CASH (cash settled). |
:17F: | Call / Put Indicator | C (call) / P (put). |
:17V: | Style | EURO (European) / AMER (American) / BERM (Bermudan). |
Real-world example
BNP Paribas buys a European EUR/USD call, strike 1.1000, notional EUR 5 million, expiry 15 August 2026, premium USD 110,000 paid by BNP to Deutsche Bank, premium value 20 May 2026 (T+2 from the 16 May trade):
{1:F01BNPAFRPPAXXX0000000000}{2:I305DEUTDEFFXXXXN}{3:{108:OPT20260516001}}{4:
:20:OPT20260516001
:22A:NEWT
:94A:AGNT
:22C:BNPAFRPP4321DEUTDEFF
:82A:BNPAFRPPXXX
:87A:DEUTDEFFXXX
:17O:Y
:32B:EUR5000000,00
:30T:20260516
:30X:20260815
:30P:20260817
:36:1,1000
:39M:EUR
:37K:USD110000,00
:30V:20260520
:53A:BNPAFRPPXXX
:57A:CHASUS33XXX
-}:17O:Y— open option (vs position close).:32B:EUR5000000,00— underlying notional EUR 5 M.:30X:20260815— expires 15 August 2026.:36:1,1000— EUR/USD strike 1.10.:37K:USD110000,00— premium USD 110 k.:30V:20260520— premium paid T+2.
Common pitfalls
- Call vs Put — sender perspective — SWIFT convention expresses the contract from party A's perspective. For the mirror counterparty, the call becomes a written put. Don't confuse direction and contract type.
- Strike quotation convention — for EUR/USD the strike is in USD per EUR (e.g. 1.1000). An inversion (USD/EUR) causes a mismatch and a material P&L risk.
- American style and early exercise — for an American option, plan MT306 or MT103 payments any time between trade and expiry. Pre-installing the settlement chain is mandatory.
- Premium delayed vs spot — the premium can be paid T+2 (spot) or later (forward premium).
:30V:must reflect it; otherwise treasury mismatch. - Knock-in / knock-out unsupported — any barrier, double barrier, digital or ladder must be confirmed in MT306. Forcing an MT305 on an exotic leads to a manual reject and an unconfirmed trade.
ISO 20022 equivalent
The ISO 20022 equivalent is fxtr.034.001.04 (Foreign Exchange Option
Trade Notification) in the fxtr domain. Marginal adoption in 2026: vanilla
options stick to MT305 and exotics to MT306.