FX Option Call Spread

Flexible Hedging solutions for business needs

Alternative Hedging Instrument for Forward Value Date

Choices for hedging instrument other than forward 

Flexibility for Customer to Set Strike Price

Flexibility in determining Strike Prices according to business needs

Option Feature

Provides the option right to purchase currency according to the agreement

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TAYTB Moment 2020 Terms and Conditions

Foreign Exhcange Hedging Solution using FX Option Call Spread (CS)

    Interest and Fee

    Other Information

    Requirements

    Disclaimer

  1. The customer will be charged a premium fee at the time of the transaction, where the amount of the fee will be determined by market price
  2. Customers will incur additional premium fees when customers are required to do dynamic hedging
I. Product Description

Call Spread Option (CSO) is a structured product with combination of buy call options and sell call options carried out simultaneously in one transaction contract with different strike prices and same nominal

II. Product Simulation

Company ABC will do Call Spread Option (CSO) USD/IDR with detail transaction as follows:

Transaction Nominal     : USD 2,000,000
Strike Price 1                : 13,500
Strike Price 2                : 15,000
Tenor                            : 1 year
Underlying transaction : Loan in USD 2,000,000

  1. CSO Transaction executed
    When the Call Spread Option transaction matures, the market rate is at the level of USD / IDR 13,800.00 so that company ABC exercises the Call Spread Option transaction and purchases foreign currencies against the rupiah through Spot Transactions at strike price 1 of USD / IDR 13,500.00
  2. CSO Transaction not executed
    When the Call Spread Option transaction matures, the market exchange rate is at the level of USD / IDR 13,000 and PT ABC does not exercise the Call Spread Option transaction, and makes foreign exchange purchases against the rupiah through Spot buying transactions at the market rate of USD / IDR 13,000 with a nominal value of USD 2,000,000.00 (two million United States dollars). PT ABC may use the same Underlying Transaction as the initial Call Spread Option Underlying Transaction in the form of a loan to conduct the said Spot Transaction
  3. Dynamic Hedging Transaction
    PT ABC conducted a Call Spread Option transaction with a strike price 1 of USD / IDR 13,500.00 and a strike price 2 of USD / IDR 15,000.00, with a tenor of 3 (three) years with Underlying Transactions in the form of foreign debt. If in the second year PT ABC assesses that the rupiah exchange rate will be greater than the strike price 2 of USD / IDR 15,000.00, then PT ABC conducts the next Call Spread Option (dynamic hedging) transaction with a strike price 3 equal to the strike price 2 set up in the Initial transactions, which is, USD / IDR 15,000.00 and strike price 4 of USD / IDR 16,000.00

III. Risk of Product and Other Information
  1. Market Risk
    Risk arises due to fluctuation or movement of the reference instruments (exchange rate and interest rate)
  2. Credit Risk
    Risks that arise if a customer is unable to meet his obligations in accordance with the facilities provided, the Bank has the right to liquidate the customer's position and all costs that may arise will be charged to the customer. The bank also has the right to propose additional collateral if the assets and market value of the product are insufficient for the market value
  3. Settlement Risk
    Interference or failure during the settlement process which can cause delays in settlements outside the Bank's control. The customer may be asked to bear the loss or costs incurred because of a pending settlement

IV. Facility / Channel

Transaction can only be performed with Treasury Advisory or contact the Relationship Manager (RM) for more information related to this product


V. Complaint Procedure

Customers can submit complaints related to products through:

  1. Call OCBC NISP di 1500 – 999 (domestic call) atau 021-26506300 (overseas call)
  2. Contact Relationship Manager (RM)
  3. Email to callcenter@ocbcnisp.com
  4. Click www.ocbcnisp.com

Terms and Condition

  1. Customer must sign CSO trade confirmation for every transaction.
  2. Customer must have limit to do CSO which will be given by Relationship Manager
  3. Customer must provide Underlying Document and Suitability to do CSO
  4. Customers may be liable for dynamic hedging if they meet the requirements in applicable regulations
  1. You hereby acknowledge that you have read, received explanation and understood the product and/or service as specified in this Summary of Product and/or Service Information (“Summary”) and have informed, understood and accepted any consequences of product and/or service including all inherent benefits, risks and costs.
  2. This Summary is intended only as an information and does not aim to be a basis for investment decisions. Past performance is not an indication of future performance. Any proposal documents for investment related products, must be studied further. Any projections, opinions or other statistical facts displayed in this information are only an indication and are not guaranteed in any form. You must determine your own decisions in accordance with the needs and investment strategies by considering legal, tax and accounting issues. Based on good intentions and moral responsibility, Bank OCBC NISP and each of its employees are not responsible for any direct or indirect losses, or as a consequence arising from the use of and dependence on this information in an investment decision.
  3. Bank OCBC NISP reserves the right to reject your product and/or service application if it does not fulfil the requirements and the application of laws and regulations.
  4. You have to carefully read this Summary and contact Bank OCBC NISP if there are further queries in respect of the product and/or service contained in this Summary.
  5. This Summary has been adjusted to be in accordance with the provisions of regulations including the regulations of Financial Service Authority.

This Summary is made in English and Bahasa Indonesia, and in the event of inconsistency between the version, Bahasa Indonesia shall prevail.

PT Bank OCBC NISP Tbk terdaftar dan diawasi oleh OJK dan merupakan peserta penjamin LPS

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