OIS (Overnight Indexed Swap)
Product name: OIS – Overnight Indexed Swap
Instrument type: Interest rate derivative (Swap)
Use: Short-term interest rate risk hedging or tactical portfolio management
Objective :
Allows the exchange of interest flows: one at a fixed rate against one at a variable rate (overnight rate) over a given period.
Functioning :
Two parties agree to exchange, at maturity, the interest generated on a notional capital: one based on a fixed rate, the other on an overnight variable rate (e.g., €STR, SOFR, Fed Funds, etc.). No principal is exchanged. At the end of the contract, only the net interest difference is paid.
Advantage :
A simple hedging tool against short-term interest rate fluctuations
Allows for fine-tuning of the interest rate strategy
Risk limited to the interest rate differential (if used correctly)
Market risk:
Unfavorable fluctuation in the variable rate. Counterparty risk: default by one of the parties. Product reserved for professional and supervised management.
General terms and conditions (example):
Duration: 1 to 12 months (renewable)
Notional amount: Based on the client's portfolio
Fixed rate: Defined at signing (e.g., 2.00%)
Variable rate: €STR, SOFR, or local equivalent
Payment due: Single payment at the end of the contract
This product is intended solely for sophisticated or institutional investors within the framework of a management mandate or a strategy defined with the client.
Call/Put Options (Customized Strategy by OIS Finance)
Financial options allow you to take a position on an asset without buying it directly.
Call: Right (not obligation) to buy an asset at a price fixed in advance.
Put: The right (not the obligation) to sell an asset at a price fixed in advance.
Conservative Profile
Cautious profile: seeks stability, low risk exposure, preference for capital protection.
Using puts as insurance against market declines (hedging)
Issuing covered calls to generate income on held positions
No directional speculation
Balanced Profile
Moderate profile: accepts a certain level of risk in order to aim for a balanced return over the medium term.
Combined strategies: buying calls or puts depending on market expectations
Using spreads (call spread or put spread) to manage risk
Limited allocation to options within a diversified portfolio
Dynamic Profile
Offensive profile: seeks high performance, accepts volatility and the risk of capital loss.
Directional speculation with calls or puts
Using leverage via short-term options
Complex strategies: straddles, strangles, condors, etc.
This information sheet is for guidance purposes only and must be adapted to the regulatory framework and the client's investment mandate. All option strategies involve risks, including the potential loss of capital.
Futures Contracts (Derivatives)
Futures contracts are standardized agreements to buy or sell an asset at a future date at a price fixed today. They are used for both hedging and speculation.
Objective :
To allow protection against future price fluctuations or to profit from the anticipated performance of an asset.
Functioning :
Contract traded on an organized market (e.g., EUREX, CME) Covers assets: indices, currencies, rates, commodities Maturity and contract size fixed in advance Requires a margin (guarantee) Gains or losses are recorded daily (margin call)
Concrete example:
A client believes the EuroStoxx 50 index will rise. They buy a futures contract on this index at 4,000 points. → If the index reaches 4,100 at expiration: profit = 100 points × point value → If the index falls to 3,900: loss = 100 points × point value
The variations are daily: the accounts are adjusted every day (mark-to-market).
Benefits :
Liquid, transparent and standardized instruments
They allow for effective portfolio hedging.
Powerful leverage (use with caution)
Risks:
Leverage amplifies potential losses
Risk of margin variation (high volatility)
Not suitable for cautious or inexperienced users
This product is reserved for sophisticated or professional clients as part of a structured investment strategy.