In 8.9.0.4 you either use
-o output.html source.xml style.xsl
source.xml style.xsl >output.html
In 9.0 you can use
-o:output.html -s:source.xml -xsl:style.xsl
and the options can then go in any order.
Michael Kay
http://www.saxonica.com/
Author, XSLT Programmer's Reference and XPath 2.0 Programmer's Reference