Corporate Forex Wealth Management

I. Structured deposit

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 entities, etc..

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 fluctuations.

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.