Name
Liang De Bao
Introduction
Liang De Bao: customer sells a foreign exchange option to the bank as per their own judgments while putting in a time deposit, the customer can acquire option premium besides the interest of time deposit (net of interest tax). On maturity of the options, if the exchange rate change is in favor of Bank of China, the bank will not exercise the option, then the customers can obtain the return higher than time deposit interest; If the change is in favor of Bank of China, the bank will exercise the option, and convert the customer's time deposit principal into the corresponding linked currency as per the foreign exchange rate in agreement.
Trading hours: GMT (Beijing Time) 10:00 to 16:30 each business day, and is closed during the international financial market closure.
Automatic renewal or unwinding in advance cannot be applied to option trading.
Trading currency: available deposit currency, linked currency and term, the current available currencies are USD, EUR, JPY, GBP, AUD, CHF, CAD, both cash and spot exchange can be traded.
As for the face value of option, the starting amount should be set according to certain conditions.
The target exchange price for foreign exchange options trading are EUR against USD, USD against JPY, AUD, GBP against USD, USD against CAD, USD against CHF.
Large-scale customers can also choose cross exchange price among non-US currencies as the target exchange price.
Term: With the maximum term of six months and the minimum term of one day, the specific term is determined by maturity date in the option quotation as published by Bank of China on that very day.
Our Advantages
Low starting point of amount; Abundant term structures; three exercise prices are available to be selected; support the commissioned pending order; provide the quotation of main cross transactions.
Target Customers
All the natural person, who opened foreign currency accounts in Bank of China with full civil competence, can apply Bank of China for personal foreign exchange options business. Please go to the branch of Bank of China to complete the procedure in person.
Process
To open foreign currency account (either current or time will do) of Bank of China; Please go to Bank of China Financial Center to sign Agreement on Foreign Exchange Option Trading with Bank of China in person; on the trading date and maturity date, Bank of China will decide whether to exercise capital transaction or not as per the option conditions.
Put option to the bank. You have to choose:
1. Linked currency: Another currency which should be delivered on the maturity date.
2. Face value of option: The amount of foreign exchange transaction on option maturity date
3. Option maturity date: that is the option maturity date designated in the agreement.
Bank of China will designate foreign exchange rate with you (that is, the exchange rate, agreed by the two parties in Agreement on Foreign Exchange Options Trading, and is adopted by the option buyer on option maturity date to exercise foreign exchange transactions), and Bank of China pay a certain amount of option premium to the customer.
On the option maturity date, Bank of China will select the deposit currency or your pre-selected linked currency which will be converted on the designated foreign exchange rate before payment, according to the trend of foreign exchange market. If the maturity date is off-duty day of bank or relevant international market holiday, the maturity date will be adjusted as per related international market practices.
Required Documents
Valid ID certificate.
Risk Disclosure
Is "Liang De Bao" suitable for you?
On the maturity date, you will get time deposit interest and option premium, but you are also confronted with the foreign exchange rate risk.
You may consider applying for this business in one of the following circumstances:
1. The foreign exchange rate of a certain currency is in your favor as per your expectation;
2. Or you have demand for both the base currency and the alternate currency;
3. Or you accept obtaining the alternate currency on agreed foreign exchange rate on maturity date.
4. Since any investment product bears the feature of risk, investors should understand the transaction risks while considering their own risk tolerance and expected returns, etc., before transaction determination.
Above is for reference only, please refer to relevant regulations of local branch of Bank of China for specific business type and the transaction process.
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