Costs related to trades in Equity Derivatives

Transcription

1 Costs related to trades in Equity Derivatives 1. Overview of costs When you trade Equity Derivatives, whether these are Exchange Traded or OTC (traded Over The Counter ), you will have transaction costs when entering into and closing the position. When you buy Exchange Traded Derivatives you will pay a brokerage fee to DNB and a clearing/trading fee to the relevant Stock Exchange. In addition there will be an interest rate margin for some products where DNB is financing your exposure through the derivative. The interest rate margin is included in the price of the product, and is dependent of the time to maturity. The above costs are payable when the transaction is made. There are no running expenses in relation to these products. In order to realize a profit or loss on the investment the position must be closed. When closing in the form of sale or repurchase the customer will pay a brokerage fee to DNB and clearing/trading fee to the relevant Stock Exchange, in the same way as when the position was entered into. Upon expiry/maturity of the product the customer will pay a brokerage fee to DNB and an exercise/expiration fee to the Stock Exchange. Below is an overview of applicable costs. This is based on standard brokerage rates for trading via broker. Equity Derivatives p.a. * exercise/expiration fees) Rentemargin Børsavgifter (Clearing, trading og Indeks futures (f eks OBX/OMX) 0.50 % NOK 500 Indeks opsjoner (f eks OBX/OMX) 3.00 % NOK 500 Exchange Traded Stock forwards 0.50 % NOK 500 Exchange Traded Stock options 3.00 % NOK 500 OTC Stock forwards 0.50 % NOK 1, % Se børsens kostnadsoversikt** OTC Stock options 3.00 % NOK 1,000 N/A Se børsens kostnadsoversikt** Total Return Swaps 0.50 % NOK 1, % N/A * Over DNB sin fundingkostnad for samme løpetid som forward. Rentekostnaden er bakt inn i prisen til kunden. ** Børsavgifter for OTC derivater gjelder kun ved clearede handler Overview of costs to Oslo Stock Exchange: Derivatives%20-%20List%20of%20Fees.pdf Overview of costs to Nasdaq:

2 International futures * Denne kostnaden kan variere, og bør diskuteres med megler før handel. Rentemargin p.a. (*) Clearing, trading og exercise/expiration fees* N/A EUR 2,00 per kontrakt N/A EUR 1,80 per kontrakt N/A EUR 1,80 per kontrakt N/A EUR 2,40 per kontrakt N/A EUR 3,10 per kontrakt N/A GBP 1,68 per kontrakt N/A USD 2,66 per kontrakt N/A JPY 535,00 per kontrakt International options DAX 0,50 % NOK EUROSTOXX 0,50 % NOK DJ STOXX 600 0,50 % NOK HEX25 0,50 % NOK IBEX 0,50 % NOK FTSE 0,50 % NOK SPMini 0,50 % NOK NIKKEI 0,50 % NOK Eurostoxx stock options 3,00 % NOK DAX options 3,00 % NOK US Index and Stock options 3,00 % NOK * Denne kostnaden kan variere, og bør diskuteres med megler før handel. Rentemargin p.a. (*) Clearing, trading og exercise/expiration fees* N/A EUR 1,70 per kontrakt N/A EUR 2,00 per kontrakt N/A USD 3,00 per kontrakt

3 2. Examples of total costs for a trade In the examples below the total costs for a trade in Equity Derivaties is calculated as the sum of the brokerage fee paid initially and upon closing of the position, exchange fees and interest rate margin where relevant. This cost is even calculated as a percentage of exposure or amount purchased. The examples are based on standard brokerage fees and given examples for amounts. The examples are based on the clearing/trading fees at Oslo Stock Exchange. The fees may vary from market to market and based on whether the customer purchases, sells or redeems the product. For calculation of the interest rate margin for OTC Stock forwards and Total Return Swaps we have assumed a 3 month sample period. The cost of the interest rate margin is embedded in the purchase price for the product. Brokerage fee and exchange fees is additional. Trades and assumptions used in the examples: Antall kontrakter Pris Multiplikator av ant. kontrakter Antatt eksponering eller handelsbeløp** Antatt løpetid Indeks future Indeks opsjoner Exchange Traded Stock forwards Exchange Traded Stock options OTC Stock forwards* OTC Stock options* NOK 70, NOK 3,500, NOK 5, NOK 50, NOK 50, NOK 500, NOK 2, NOK 25, NOK 200, NOK 5,000, NOK 10, NOK 250,000 3mnd 3mnd Total Return Swaps 1,000, NOK 100,000,000 3mnd Total costs in amount and percent: Antall kontrakter Antatt eksponering eller handelsbeløp** Antatt løpetid Totalkostnad i beløp*** Totalkostnad i % av handelsbeløp Indeks future Indeks opsjoner Exchange Traded Stock forwards Exchange Traded Stock options OTC Stock forwards* OTC Stock options* 1 NOK 70,000 NOK 1, % 50 NOK 3,500,000 NOK 35, % 5 NOK 5,000 NOK 1, % 50 NOK 50,000 NOK 3, % 5 NOK 50,000 NOK 1, % 50 NOK 500,000 NOK 5, % 5 NOK 2,500 NOK 1, % 50 NOK 25,000 NOK 1, % 20 NOK 200,000 3mnd NOK 3, % 500 NOK 5,000,000 3mnd NOK 91, % 20 NOK 10,000 NOK 2, % 500 NOK 250,000 NOK 18, % Total Return Swaps 1,000,000 NOK 100,000,000 3mnd NOK 1,750, %

4 * Exchange fees for OTC derivatives are only applicable for cleared products. In this example we have included clearing fees. ** For futures, forwards and TRS we show the customer s exposure, and not (necessarily) the initial outlay for the trade *** Costs for both entry and closing of a position. The example assumes a flat price development from purchase to sales. The product can also be redeemed or expire, where other exchange fees may apply. Cost elements included in the total cost: Rentemargin p.a. Børsavgift i % av handelsbeløp/ NOK per kontrakt Indeks future Indeks opsjoner Exchange Traded Stock forwards Exchange Traded Stock options OTC Stock forwards* OTC Stock options* 0.50 % NOK 500 NOK % NOK 500 max. 0,75% / min. NOK 2, % NOK % 3.00 % NOK 500 min. 0,75% / max. NOK % NOK 1, % 0.04 % 3.00 % NOK 1,000 min. 0,75% / max. NOK 20 Total Return Swaps 0.50 % NOK 1, % N/A * Exchange fees for OTC derivatives are only applicable for cleared products. In this example we have included clearing fees

5 3. Examples of the effect costs have on the return on the investment Instrument Antall kontrakter Pris* The examples below illustrate how the cost affects the return on the investment. We have based our calculations on standard brokerage fees for trades via broker, exchange fees for Oslo Stock Exchange and an interest rate margin of 3 % p.a. for OTC Stock forwards and Total Return Swaps. In order to show the effect the cost has on the return we have based us on an annual return of 8 % (about the average historical return on Oslo Stock Exchange main index the last 20 years, ). Examples based on historical return may not be correct for your investment, for which the return may be either lower or higher than the given example. All amounts are Norwegian kroner (NOK). Trade examples and assumptions: Underliggende Innløsningskurs Delta på handelstidspunkt Spotkurs Mnd Løpetid Investert beløp Underliggende eksponering Indeks future OBX , % Indeks opsjon OBX 50 14, % Indeks opsjon OBX , % Indeks opsjon OBX 50 23, % Indeks opsjon OBX 50 35, % Exchange Traded Stock forward ORK 50 85, % Exchange Traded Stock option ORK 50 1,00 87,5 32 % Exchange Traded Stock option ORK 50 2, % Exchange Traded Stock option ORK 50 3,60 82,5 72 % OTC Stock forward SUBC , % OTC Stock option SUBC 500 2, % OTC Stock option SUBC 500 8, % OTC Stock option SUBC , % Total Return Swap SIN , % * For OTC Stock Forwards and TRS the interest rate margin is embedded in the price Return before and after costs: Instrument Spotkurs ved forfall Derivatverdi ved stengning Avkastning før kostnad** Sum direkte kostnader*** Avkastning etter kostnad Indeks future 714,0 714, Indeks opsjon 714,0 0, Indeks opsjon 714,0 0, Indeks opsjon 714,0 14, Indeks opsjon 714,0 34, Exchange Traded Stock forward 86,7 86, Exchange Traded Stock option 86,7 0, Exchange Traded Stock option 86,7 1, Exchange Traded Stock option 86,7 4, OTC Stock forward 122,4 122, OTC Stock option 122,4 0, OTC Stock option 122,4 2, OTC Stock option 122,4 22, Total Return Swap 102,0 102, ** For OTC Stock Forwards and TRS the return is shown after the interest rate margin since this is embedded in the price of the product

6 *** Brokerage and clearing fee