Derivative and Structured Products​

This is an investment product that can be preferred by investors who aim to increase deposit returns according to market expectations.

Through the option transactions in the DCD, our customers transfer the right to buy/sell a specified currency at a certain level and maturity to the bank, in return for receiving a specific premium. With the return from this premium, the yield of the associated deposit also increases.

Treasury Bills are short-term government debt securities with a maturity of less than one year, while Treasury Bonds are government debt securities with a maturity of one year or longer, indexed to foreign currencies.

• You can take advantage of opportunities that may arise in the markets for your investments.
• Applicable to all currency pairs. (USD/TRY, EUR/TRY, EUR/USD...)

You can obtain detailed information about the Option Preferred Account from Odeabank branches.

Options are contracts that grant the investor who purchases the option the right to buy or sell an asset at a specified price within or at a certain date, until the expiration date. The right to exercise the option (to apply the option) belongs to the contracting party who purchased it. In exchange for this option right, the buying party pays the seller a premium that was initially agreed upon. Option contracts can be traded on both organized exchanges and over-the-counter markets. Therefore, the expiration, amount, and price of the option can be determined according to specific needs.

Additionally, based on the achievement of a certain level of the exchange rate, active (knock-in) or disabled (knock-out) options, as well as strategies such as strangles and straddles, which can be composed of vanilla options, can be utilized with components tailored to specific needs and expectations.

• The Option Buyer, by engaging in an option contract and paying a certain premium, is not affected by potential price movements of the underlying instrument at the expiration date. They have the right to decide whether to execute the transaction on the maturity date.
• The option provides the buyer with an opportunity to insure themselves against price movements, to the extent they anticipate.
• The Option Seller has the opportunity to achieve a return commensurate with their accepted level of risk. Therefore, they seek a premium from the option buyer in addition to the risk-free (interest) return of the asset they own.

You can obtain detailed information about Option Transactions from Odeabank branches.

Forward is an agreement that regulates the purchase/sale of one currency against another currency at a predetermined future date and exchange rate. Its most significant advantage is the ability to determine the transaction's maturity date and amount according to the need. At maturity, the parties are obligated to fulfill their commitments at the predetermined rate and amount. Forward transactions are primarily used by institutions and investors as a derivative instrument to manage currency risk.

• Regardless of the level of the traded currency at the time of the transaction's maturity, the agreed-upon forward rate will remain valid. This shields the customer from market fluctuations and price changes.
• It does not require an upfront premium payment.

You can obtain detailed information about Forward Transactions from Odeabank branches.

Structured products are financial instruments where one or more different financial instruments are combined and packaged according to various strategies based on derivative products. They can be designed based on any product and can be differentiated according to the customer's risk preference. When we look at the product types, we can make a fundamental distinction between direction-oriented and return-oriented. Here are some notable product examples and explanations:

Asimetrik Forward

Asymmetric Forward is a zero-cost option transaction where the client's profit in advantageous positions is limited through a leverage coefficient compared to the standard forward transaction. For instance, if the leverage ratio is two, the client will execute one unit of transaction when in profit and two units when in loss. Therefore, the asymmetric forward rate allows taking positions at more favorable levels compared to a normal forward rate.

Similar risks present in a standard forward transaction also exist here. As the client holds obligations, adverse movements in the exchange rate may lead to losses.

Call Pivot

Call Pivot is a zero-cost option designed for customers expecting potential transactions both for buying and selling currencies within predefined maturities, while expecting exchange rates to remain within a specified range. If the exchange rates move in line with their expectations, customers will have the opportunity to execute transactions for buying or selling currencies at advantageous levels on maturity dates.

However, if the spot exchange rates on that date are above the predefined band for the transaction, the customer will be compelled to sell their currency at levels lower than the market rate. Transaction sizes will vary according to the leverage ratio. If the leverage ratio is two, the client will execute one unit of transaction when in profit and two units when in loss.

Pivot Forward

Pivot Forward product, in addition to the Call Pivot operation, offers customers the ability to conduct buy and sell transactions at advantageous levels if the exchange rate remains within the specified bands at each maturity, and also provides the opportunity to sell at an advantageous level if the rate falls below the bands.

However, if the exchange rates on that date exceed the bands set for the transactions, the customer may need to sell their currency at levels lower than the market rate. Transaction sizes will vary according to the leverage ratio. If the leverage ratio is two, the client will execute one unit of transaction when in profit and two units when in loss.

Zero Cost Collar

This product, consisting of two separate option transactions for buying and selling at different levels for a single maturity, provides a customer with an existing position in the spot market the opportunity to limit their losses without any cost, depending on their expectation of the rise or fall of the currency exchange rate. If the movement favors the customer's current currency position, their profit will also be limited to a certain extent.

Digital Options

Structured products are designed based on various scenarios such as the currency exchange rate staying within or outside certain bands during the maturity period. They can be offered to the customer at no cost provided that the conditions for taking on the risk of the exchange rate are met. If the conditions are met, the customer has the opportunity to gain leveraged returns with a certain risk.

At Odeabank, you can find numerous alternative investment products like these. Tailored to different maturities and risk preferences, we strive to provide structured products that align with your goals, ensuring high-quality service.