What are Futures and Options?
Futures is a standardized contract between two parties obligating them to buy or sell a pre-determined quantity of specific underlying asset of pre-determined features at a pre-determined price in a certain maturity. This underlying assets are generally commodity/goods (agricultural products, energy products, metals), equities, stock indices, interest rates, precious metals (Ounce & Gram Gold), foreign exchanges and/or parity.
Option Contracts is an agreement concluded between two parties which gives option buyer the right, but not the obligation, to buy or sell the asset or financial indicator, at a certain price, until a certain date (or at a certain date) and in return of a certain amount (premium) paid by the buyer. If the option buyer uses its option right arising from the agreement, then the option seller will be obligated to buy or sell the asset or the financial indicator at the agreed price to the option buyer that uses its right.
Futures and Option contracts are traded on Borsa Istanbul Derivatives Market (VIOP) which is an organized market operated by Borsa Istanbul A.Ş.
Features and Advantages
- Futures and option contracts are traded in secondary market, Borsa Istanbul A.Ş. Derivatives Market (VIOP).
- Futures transactions are executed through Session room, HSBC Internet Banking and Mobile Banking application; whereas, Option contracts can only be executed through Session Room.
- To be able to execute Futures and Options transactions, it is necessary to open an account and through HSBC Yatırım Menkul Değerler A.Ş. The prerequisite for opening an account with HSBC Yatırım Menkul Değerler A.Ş. is to have an account with HSBC Bank A.Ş.
- Futures and Option Contracts are served at the HSBC Bank A.Ş.'s international service quality with HSBC Securities’ expert support.
With Futures and Options, you may execute a trade in the opposite direction of your position in the commodity, foreign currency or financial product you have in the spot market. By this way, you can protect yourself against price changes that may occur in the spot market.
In the Futures and Options market, investors have the opportunity to take a higher position with smaller amounts. However, the leverage effect, in addition to the possibility of higher return compared to the spot market also carries a higher risk of loss.
Single stock futures and option contracts can be traded during the day time of 09:30-18:10 whereas other derivatives can be traded between 09:30-18:15. Additionally, futures on indices, USD/ounce gold and silver can also be traded in the evening session (19:00-23:00). Thus, it is possible to take and change positions even in the evening when other markets are closed.
In the transactions carried out in the futures and option market, the counterparty role (buyer versus seller, seller versus buyer) is undertaken by Takasbank. Takasbank guarantees the completion of transactions.
Turkish Lira collaterals held at Takasbank benefit from the accumulation of interest by Takasbank Fund Management.
Futures and Options require less initial investment than traditional investment instruments. By depositing a small amount of collateral, the entire return (or loss) of the relevant vehicle is obtained. Long and short positions enable clients to invest in the expectations of both decreasing and rising prices. The definition of Long/Short positions are given under the “Frequently Asked Questions” section.
Customers who have an investment account in HSBC Yatırım Menkul Değerler A.Ş. and fulfilled the Premier criteria, are able to execute the Futures and Options transactions. Major underlying assets are Equities, Stock Indices, Foreign Exchange and/or Parities, Pure Gold and Pure Silver. Futures and Options contracts that are tradable through your HSBC Securities account are listed below according to their underlying assets above.
Futures and Option trading orders may be given through HSBC Bank A.Ş. Session Room, HSBC Internet Banking and Mobile Banking application.