Interest products

Transactions that are used to hedge existing and future investments or loans, bond hedges and/or substitute investment in bonds, trends in interest rate curves and forecasts, and more. These transactions serve all of the customers that were mentioned above.

Forward Rate Agreement

FRA buyers insure themselves against an interest rate increase that is above the agreed-upon interest rate, while FRA sellers insure themselves against an interest rate decrease below the agreed-upon interest rate.

IRS transaction

An agreement in which party A undertakes to transfer to party B (and vice versa) future payment flows in a certain currency for a period and payment dates that have been determined in advance.

Option on interest

Allows the buyer of the option to set an upper limit for the variable interest payment that they will have to pay, or alternatively, a lower limit for the variable interest payment that they will have to receive. Cap option – allows to set a "ceiling" for the interest rate. Floor option – allows to set a "floor" for the interest rate.

Swaption – option on IRS, there are 2 distinguished types of this instrument:

Payer – gives the buyers of the option the right to buy IRS, in other words, to enter into an IRS transaction where they pay a fixed interest rate and receive a variable interest rate.

Receiver – gives the buyers of the option the right to sell IRS, in other words, to enter into an IRS transaction where they receive a fixed interest rate and pay a variable interest rate.

Index contract

An agreement between the parties in which one party undertakes to provide a link to an index of some amount of a base asset (in shekels) at a date that is determined in advance, and in return the other party undertakes to pay a price that is determined in advance at that date.