Interest rate options

Limit interest rate risk with interest rate options

Interest rate options provide a hedge against interest rate fluctuations. Whereas an interest rate swap fixes the interest on a loan, interest rate options can be used to limit the interest rate risk of a loan. An interest rate cap secures an upper limit for the interest rate on a loan. A combination of an interest rate cap and an interest rate floor, on the other hand, sets a range for the interest rate on a loan. Different option strategies can be tailored according to the customer’s needs.

How does you business benefit from an interest rate option?

• An alternative for an interest rate swap when you do not want to fix the interest rate, for example, due to the market situation.
• Suitable as part of different interest rate strategies.