Structured deposit is a time deposit.
Structured deposit's interest is linked to certain financial instruments, such
as interest rate, foreign currency exchange rate, the credit ratings of certain
II. Forward Rate Agreement (FRA)
FRA is an agreement signed between BOCOM
and its customers to determine the interest rate for a certain future period.
Put simply, it is an obligation to pay or receive at the interest rate as
agreed, regardless of future interest rate movements.
III. Interest rate swap
Interest rate swap is the mutual exchange
of assets or liabilities, in different forms of interest rates under the same
type of foreign currency, between BOCOM and its customers in a stipulated
period of time.
IV. Forward forex transaction
Forward forex transaction is a
foreign currency transaction conducted between BOCOM and its customers, on
an agreed future date at an agreed exchange rate.
V. Forex option
Forex option trading is a trading of
rights. The option buyer has the right to buy from or sell to the option seller
an agreed amount of foreign currency at an agreed exchange rate at a certain date
in the future; yet the buyer of the option also retains the right not to
execute the above-mentioned trading agreement. To acquire the above-mentioned
rights, the option buyer is obliged to pay a certain amount of fee -- option
premium -- to the option seller. Through payment of the option premium, the
buyer acquires the right to determine whether to execute the transaction and
the option seller will bear the possible risks of future currency-rate
VI. Currency swap
Currency swap is a contract to exchange cash flow streams
in a specified period, to reduce foreign exchange risk and interest rate risk.