| ||OCBC NISP Option|
OCBC NISP Option consists of 2 (two) types:
- Currency Option
Designed for customers who want to cover their foreign currency liabilities with better hedging cost structure because the customers buy the rights to buy or sell another foreign currency and not the right to pay the premium.
Currency Option divides into 2 (two) groups:
- Sell or buy Call Transaction Call is the right to buy the reference of other foreign currency.
- Sell or buy Put Transaction Put is the right to sell the reference of other foreign currency.
- Interest Rate Option
It is designed for customers who want to cover the risks of the interest rates fluctuation so therefore the cost which may occur could be measured.
Interest Rate Option divided into 3 groups:
1. Interest Rate Cap
Offered to customers who have floating interest liabilities and has view that interest rate will be increase in the future, therefore they decide to hedge their liabilities. If during the Cap contract period the interest rate continues to increase higher than Cap interest, it means that the customers will be protected to the increasing of interest rate above the Cap.
2. Interest Rate Floor
Offered to customers who own assets with floating interest rate and view that the interest rate will decrease, therefore the customer should do hedging transaction. If during the contract period the market interest rate decrease and become lower than floor interest rate, it means that customer do hedging on its investment with minimum return equal to floor rate.
3. Interest Rate Collar
Combination between Interest Rate Cap and Interest Rate Floor.