Options

With the options which we have structured in the standard (plain vanilla) or structured (exotic) types in line with the needs of our customers, we ensure that our customers are able to carry out their commercial activities safely by minimizing the risks which they are exposed to.

Options are agreements which provide the right to buy or sell a certain amount of an asset at a certain price on a certain date or until that day in the future. In contrast with forward transactions, on the day the agreements are entered into, it is not yet determined whether or not the transaction will take place on the maturity date; this will depend on the market price. Options written on exchange rate are options which contain the right or obligation to buy (call) or sell (put) the currency at a certain strike price. Since the option agreement provides the buying party with the right to buy and sell, the buying party will use this right where it is profitable to do so. The party selling the option, on the other hand, is required to fulfil the obligation to buy or sell if the party buying the agreement wishes to exercise their right.

The main factors affecting the option price are the spot price of the underlying asset, the strike price, the number of days until maturity, the volatility of the underlying asset and the risk-free interest rate.

While the risk carried by the buying party of the option agreement is limited to the premium paid, the liability of the selling party is unlimited. The option seller also assumes the capital risk.

For detailed information on the taxation of futures transactions, click here.