valuten risk

FX Option

Save FX rate for a future date with the
freedom to benefit from the market as well

The FX option is a derivative financial instrument. The client-buyer of the option may exercise his right to buy or sell a certain amount in a given currency within the maturity date, at his own discretion (for American type options) or on the maturity date (if the option is European type), as well as to sell the option back to DSK Bank. The option provides a right, but not an obligation for the client, to buy or sell an asset (currency) under pre-agreed terms in the order for execution of the FX option, for which the client pays in advance a premium to DSK Bank. A barrier may be incorporated in the FX option. FX options with a barrier (barrier options) are activated or deactivated depending on the barrier reached.


FX Option Parameters:

  • Maturity date

  • Premium

  • Exercise price

  • Denomination

  • Underlying asset (currency pair, reference currency pairs listed below)

  • Call option right to buy currency, Put option (put option) right to sell currency

  • Barrier FX options allow achieving a more optimal premium and building a strategy according to exchange rate expectations

  • Barrier FX options are reached or hit when the relevant level is reached at any point until the option matures


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Term:
Usually FX option transactions are concluded for a period of up to 1 year

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Reference currency pairs can be:
EUR/USD, EUR/GBP, EUR/HUF, EUR/JPY, EUR/CHF, USD/JPY, USD/CHF

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Objectives:
Achieving complete elimination of FX risk and predictability of payments



*On the maturity date for European type and upon expiration of the term for American type options, the client is not obliged to buy or sell currency, according to the terms of the submitted order for FX option to the FX options trading agreement.

Target market of the product

The FX Option is a financial instrument, which the Bank manufactures and distributes as a product. The table below sets out the criteria for determining for which client profile the product is compatible with or not.

 

Positive

Negative

Type of clients

all types of clients: retail, professional and eligible counterparties

 

Clients’ knowledge and experience относно

- regarding the FX markets, functioning and factors affecting movements;

- the movement and potential expectations on the hedged FX pairs;

- the product FX option - rights, obligations, parameters affecting the value of the currency option;

- hedging the currency exposure by entering FX Option;

- the possible maturity scenarios of the currency option

does not meet the indicated knowledge and experience requirements

Clients’ financial situation with a focus on the ability to bear losses

to fix a maximum amount of negative result when buying a currency option

 

Clients’ risk tolerance and compatibility of the risk

if the objective is hedging, the client's risk appetite will not be taken into account. In other cases, the client's risk appetite should be high (risk category 7 of 10)

inclined to bear the risks of negative deviations of the respective FX pair in case the client's objective is to hedge. In cases the objective is speculation - when it is not inclined to bear the risks of negative movements of FX pairs

Clients’ objectives and needs

to hedge or to provide liquidity

 

Contact dealers:

Treasury Sales Department

 

Deyan Mankovski – Head of the Treasury Sales Department – 02 80 10 862

Kalina Mays – Head of FX Unit, Treasury Sales Department – 02 97 66 233

Milena Lukanova – Senior Dealer, Treasury Sales Department – 02 97 66 232

Oktay Hasanov – Senior Dealer, Treasury Sales Department – 02 97 66 236

Hristo Arnaudov – Dealer, Treasury Sales Department – 02 93 91 364

Velichko Dimov – Dealer, Treasury Sales Department – 02 93 91 126

Kalina Yankova - Dealer, Treasury Sales Department – 02 93 91 133

Hristo Sugarev – Head of Asset Management Unit, Treasury Sales Department – 02 93 91 133

Ivelin Ivanov – Senior Dealer, Treasury Sales Department – 02 93 91 365

Martin Georgiev – Dealer, Treasury Sales Department – 02 97 66 234

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