Legal and physical entities

The Currency Option (FX Option) represents a right (an option) to buy or sell a given amount of one currency for another currency, at the rate agreed by the counterparts in advance, on the declared date not later than 1 year (or individually). The minimum nominal value of one deal amounts to 100.000 EUR / 3.012.600 SKK* or its equivalent in another currency traded on the interbank market.
The option to buy a given instrument is named a "call option". The option to sell is named instrument a "put option". The instrument, in the case of the currency option, is understood as a purchase or a sale of a given amount at a rate agreed in advance by the counterparts. There are two parties to every option: the buyer (buyer, holder) and the seller (seller, writer).
The buyer of a call option may, but is not obliged to, buy the instrument on the expiry date, and the seller is then obliged to deliver the instrument with the spot value date, that is on the expiry date + 2 business days. The buyer of a put option may, but is not obliged to, sell the instrument on the expiry date, and the seller is then obliged to buy the instrument with the spot value date, that is on the expiry date + 2 business days.
The buyer pays the seller the option premium, which is the price for the provision of the option right by the seller.
A Currency option can be concluded in all currencies listed on the table of exchanges of Komerční banka Bratislava. The deal is always concluded as per telephone with the dealer of the Treasury Department with the client receiving for review a confirmation of the concluded deal containing the parameters of the transaction.

* using conversion rate 1 EUR = 30,1260 SKK

Currency option is of two types:

The European type - the buyer has the right to exercise the option only on the expiry date

The American type - the buyer has the right to exercise the option at any time until the expiry date; the currency option of the American type is usually settled two business days after the expiry date.

When buying the option - hedge your currency risk the way which enables you either to use the agreed-upon exchange rate as of the set date or to not use it. (This is the case when the actual market rate of the given date is more favourable for you than the rate which was agreed upon.)

When selling the option - get a premium.

You can ask for this product/service at any KB Bratislava business center. For further information about this product/service, please contact your Relationship manager or write to us to our e-mail address koba@koba.sk.