COMMERCIAL

DERIVATIVE PRODUCTS | FORWARD

It is the transaction of purchase/sale of an asset for a future date at a price set today. While these transactions are used for speculative purposes, it is mostly used by foreign trade firms to eliminate / manage the currency risk.
For example, by purchasing forward FX, importing companies get the chance to take precautions against the possibility of increase in foreign exchange rates that might occur in a future payment.
 

SWAP TRANSACTIONS

Usually, it is a product that is used to avoid the changes in interest and currency. Most frequently used types of swap, which means the trade of assets, are Money and Interest swaps. While the exchange of capitals is the issue in money swaps, only interest payments are exchanged in interest swaps.
For example, a debt with a variable-rate may be converted into a debt with fixed interest rate in order to eliminate/manage the risk of interest with interest swap transaction.

OPTION TRANSACTIONS

Option is the right to buy or sell the product subject to contract for a future date at a price set today.
The person that purchases the option with a certain fee (option premium) will make a decision regarding the buying / selling of the product at the end of the maturity date. On the other hand, the seller of the option is obliged to buy / sell the product in case of a demand.

SECURED OPTION

It is an option transaction that a savings owner who finds interest of deposit money / deposits low and wants to increase interest income makes with the bank by exhibiting his time deposit as collateral.
Customer sells the right to convert his time deposits to another currency to the bank on a price determined in option agreement, and the bank pays premiums to the customer in exchange for this right.
The level that savings owner sells the right might as well be the level in which he consents to exchange his saving to another type of currency.
As option amount is received as deposit to collateral, customer also earns deposit gains besides option premium.
 

BANK BONDS AND BILLS

Bank bonds are the securities that the banks export as borrowers and sell with discount. Private sector bonds on the other hand, are securities exported with a discount and a coupon that have a maturity date longer than a year. The aim of banks in export is to gather resources from capital markets and offer alternative income opportunity to investors. Bank bonds/bills are no different than treasury bonds/bills other than exporter being the bank.
 

Features:

Maturity date of bank bonds cannot be less than 60 days and more than a year. Private sector bonds on the other hand, are long-term securities with a maturity date more than a year.

Bank bonds are issued at a discount. Private sector bonds are issued at a discount or with coupon.

Bank bonds provide fixed return opportunity. Private sector bonds provide fixed or variable returns.

It provides liquidity possibility via second-hand market transactions.

It can be cashed according to the market conditions on the date of transaction without waiting for the end of maturity date.

Stoppage tax of 10% is applied on the earnings obtained with bank bond/bill.

Generally, bank bills/bonds provide higher returns compared to treasury bills/bonds.

For detailed information, visit Halkbank Branches.