Derivatives are the part of stock exchange platform and usually considered as the “secondary securities” placed in stock market. PASHA Bank offers these services for bonds and currency.
PASHA Bank offers purchase and sale of the following financial instruments in local and international currency markets.
The customers personally take liability fort the agreements on these derivatives and not the Stock Exchange. PASHA Bank supports customers in organization and management with this type of agreements.
Forward is a liability to purchase or sell securities and currency at agreed price in future.
Forward is an agreement between parties outside of stock exchange.
For example, pursuant to contract a company agrees with other party to purchase/sell bond or currency at any specified day in future. Price difference that may incur on specified day will not impact the contract, as purchase/sale is performed at agreed rate irrespective of any changes in price.
According to SWAP agreement a Buyer buys certain securities or currency on agreed date for agreed price and resells them back on some other agreed day and for agreed price. Both parties execute the transaction without being affected by any possible price changes in future.
While forward considers one transaction, SWAP includes two transactions. For example, Forward agreement can consider sale of bonds in 2 months at agreed price. While SWAP agreement can consider sale of bonds in 2 months at agreed price and purchase back in 3 months at another agreed price.
Option is a liability to purchase or sell securities and currency in future at agreed price. Option is an agreement between parties outside of stock exchange. Buyer and Seller agree on selected option and stock exchange acts as a guarantor of both parties.
Unlike a forward agreement, Option agreement entitles a Company to execute the trade at specified date. If the trade is executed, then the price is agreed and any possible price change does not impact the transaction.