Derivatives

Derivatives allow you to apply financial leverage, in other words you can take more exposure than by investing the same amount in the underlying product.

Derivatives

A derivative is a financial instrument which is derived from one or more underlying assets (securities, currencies, indices etc.). Its price is related to this underlying asset.

Derivatives can generate above average profits - leverage -, but also high losses compared to the invested funds. They also allow taking advantage of falling markets.

On the Warsaw Stock Exchange there are future contracts on indices (WIG20, mWIG40), shares (ACP, KGH, PEO, PGE, PGN, PKN, PKO, PZU, TPE, TPS, OIL, CDR, GTC, JSW, LWB, TVN), currencies (EUR, USD, CHF) and also option contracts on the WIG20 index.

Investments in derivatives bear a high risk as one can loose more money than original invested Before using derivatives, please make yourself familiar with the risks inherent to this product. Please visit to learn ›› risk issues and educational material.

Collateral

If you open a position in a future contract or write an option contract, you need to provide collateral to cover potential losses. At the end of each business day we mark to the market your positions and the required collateral is adjusted, i.e. you receive excess collateral or you will be requested to add collateral - margin call.

Marking to market or daily re-evaluation means that we calculate the difference between the daily settlement price (usually the closing price) and the previous daily settlement price or the opening price (in case the positions were opened that day). At the moment of closing a position, the profit or loss on this position is calculated and booked immediately. The remaining collateral is released.

• We accept several types of collateral:
• Cash,
• Securities which we accept as collateral, we provide ›› the list of eligilble securities,
• Receivables from sell trades.

If you open a derivative position, we will first we block available cash on your account and if this is not sufficient, we will block available elgible securities and finally we will use available receivables from sell transaction to cover the required collateral. In order to avoid blocking the cash on your account, you can request us to block eligible securities - even with a collateral value in excess of your immediate needs - to cover the required collateral.

To write a call option, the underlying security has to be kept in your portfolio and will be blocked as collateral.

Agreement for trading derivatives

• To be able to trade derivatives on the WSE, KBCSP requires you to:
• Conclude an agreement for trading derivatives,
• Submit a financial statement,
• Personal Data Form,
• Apply to open an individual account with NDS (NIK), or request that KBCSP becomes you clearing agent (in case you have already an NIK account).

• To be able to trade derivatives on foreign markets, KBCSP requires you to:
• Conclude an agreement for trading derivatives on foreign markets,
• Submit a financial statement,
• Personal Data Form.

The forms can be downloaded ›› from here. There are no additional fees related to concluding the agreement for trading derivatives.