Currency Option

Currency Option
Currency Option (Purchase Rights)

The customers pays the bank premium to gain the rights of exchange buy and sell with currency option product. So the customer pays the price today to purchase a currency buy/sell contract advanced term. When the maturity date comes, our customer looks to the market conditions and if wished customer puts this contract to process and uses the rights or if the market conditions are better does not put the contract to process and makes the transaction with the market rates. With this product our customers maximum loss will be limited with the option premium paid.

Why to buy hedge option?

  • Purchased rights with the paid premium against the risk of exchange rate or parity, because it provides an opportunity to be protected.
  • By paying premium; with the rights purchased the customer can cancel.

Who is suitable for?

  • Dealing with foreign trade, importing and exporting customers,
  • Exchange rate risk on the balance sheet, regardless of the scale of our entire company,
  • Customers who order asset management operations,
  • Customers who wants to manage cash flow,
  • Who fallows exchange market and have expectations on exchange rates
  • Customers who expects foreign currency or has loan of foreign currency
  • Customers who has income and payments in different currencies.
  • It is suitable for customers who wants to guarantee the value of receivable as TL or foreign currencies.
Option contract can be arranged for different currency pairs.(USD/TRY, EUR/TRY, EUR/USD, GBP/USD....)

Example:

Setup for our customers who are concerned about the rise of exchange rates;

Suitable for customers who want to be protect against the rise in the exchange rate risk or want to exchange from USD to TL in high exchange rates.

Transaction AmountUSD 100,000
Term Date32 day
Spot Market Rate1,9300 (usd/tl)
Agreement Rate1,9500 (usd/tl)
Option PrimiumUSD 5,000

If the USD/TL rate is higher than the agreement rate 1,9500 after 32 days; Customer can use the option rights and can buy 100,000 USD from 1,9500 USD/TL exchange rate.

If the USD/TL rate is lower than the agreement rate 1,9500 after 32 days; The customer does not use the option rights, will exchange the foreign currency with the market rate.