Derivatives

Do you complain about not being able to see the future in the fast changing markets? Knowing the future price of the asset that you want to invest in is a dream anymore. With the future and forward transactions; the prices in financial markets will be as you want.

Forward is an agreement regulating purchase and sales of a currency against another currency over a term or rate specified in advance. The most important advantage is that transaction maturity and amount can be determined based on the need. The parties must fulfil the liabilities in the rate and amount specified before in the maturity.

Forward transactions are mostly used by institutions and investors for managing the rate risk.

Futures contract is an agreement regulating purchase and sale of a certain product with certain standards over a price specified when the agreement is made for a future date. Futures contracts are traded in organized markets differently from forward agreements and have standardized agreement conditions. The major conditions;

• Type of the agreement,
• Underlying asset subject to transaction,
• Amount of underlying asset,
• Maturity of the agreement,
• Limits of daily price movements,
• Minimum collateral rate and amounts,
• Determination method of settlement price.

Collateral evaluation should be performed daily for the investors performing futures contract purchase and sale. Thus, the investor has the chance to follow and manage the positions daily.

The assets subject to futures transactions are flexible; transactions can be carried out in foreign currency, equity, asset backed indices, capital market instruments and raw material backed contracts, based on the needs.

Currency (UST/TRY and EUR/TRY) BIST indices (BIST 30 and BIST 100), interest (365 day-interest rate and 91 day-interest rate) and goods (Cotton, Wheat, Gold) based derivative agreements that are traded in Derivative and Option Exchange and that you will meet via QNB present you effective and easy to reach product alternative.

VIOP gives chance to benefit from high return with a low initial margin as in all the futures markets. Besides, you can protect yourself against fluctuations in exchange rates and can profit in not only rising markets but also in the receding markets.

An alternative that will give the flexibility you need for your investments in the fast changing financial markets of new era:

"Would you like to meet QNB difference with option contracts?"

Option is a contract enabling the investor purchasing the option to purchase or sell an asset in a certain amount and certain price at any time until maturity or in a certain maturity. Using the aforementioned right to purchase and sell (applying the option) belongs to the party purchasing the contract. The party purchasing the option pays a premium, which is determinate in the beginning, to the option seller in return for this option right.

Option contracts can be traded in both organized markets and over the counter markets. For this reason, maturity period, amount and price of option can be determined based on the need.

The assets subject to option contracts are flexible; transactions can be carried out in foreign currency, equity, asset backed indices, capital market instruments and raw material backed contracts, based on the needs. The most traded contracts in our country are foreign currency and equity contracts.

Swap transaction is an agreement including periodic payment commitments of both parties. Definition of asset or assets to be transferred, fixed or variable interest rate to be applied to each asset and payment dates can be counted within fundamental elements of the agreement.

Mostly traded swaps in the swap market are money and interest swaps. The products are mostly preferred by persons or institutions aiming at managing cash flows and interest liabilities

These are the products created with combination of different products based on risk and return preferences and with diversification of return or protection options.

The biggest advantage gained is creating product alternatives exactly corresponding to the needs or demands. While the products are assessed, all the details of product and probable risks should be taken into consideration.

Full security option is an option transaction that sells the right to purchase and sell any currency in a certain maturity period at the level determined by the customer to the bank and in return, the bank makes premium payment to the customer; it is also derivative that provides deposits interest return by the capital subject to option being affiliated to time deposit for the same maturity period. Customer deposits is taken as collateral in return for option transaction.

We are inviting you to visit QNB to obtain detailed information about the fast growing and innovative products that make investors' life easier.