EYD FAQs
MOST FREQUENTLY ASKED QUESTIONS
Monex is excited to offer you the potential to generate a return on your money through our Enhanced Yield Deposit (EYD) accounts. We have addressed many questions you may have below and are happy to share more information in a brief introductory meeting. For a printable document of FAQs, please click here.
An Enhanced Yield Deposit (“EYD”) is a short-term deposit that clients make in one currency in anticipation of converting to an alternate currency in the near future. The client enters into an agreement to sell the deposit currency at a designated “Strike Price” in exchange for the alternate currency at an agreed-upon date (“Expiration Date”). This agreement gives the buyer the option to purchase the deposit currency in the event the currency is trading In The Money upon expiration. If the currency is trading Out of the Money upon expiration, no conversion will take place. The client earns a premium whether the conversion takes place or not. The EYD is considered a “covered call” transaction because the deposit currency is held as collateral.
No, the client does not pay anything. Just the opposite – the client always earns a premium whether or not the option is exercised. The counter party (the “buyer” of the option) is the one that pays the premium.
The premium is market-driven and influenced by multiple factors. These factors include the notional amount, currency pair, strike price relative to the initial spot rate, expiration timeframe, and most importantly currency volatility. The premium changes constantly based on market conditions. Your Monex expert can advise you on how best to optimize the premium.
The following currencies are available: USD, AUD, CAD, CHF, CZK, DKK, EUR, GBP, JPY, MXN, NOK, NZD, PLN, SEK, SGD, TRY, and ZAR.
No, the deposit currency can be in any of the currencies listed above.
No, the currency pairs can be non-dollar currencies.
Yes, the minimum deposit amount is equivalent to USD $200,000. There is no maximum amount at this time.
The sweet spot is between 7 to 14 days. The minimum is 7 days and the maximum is 365 days.
Monex’s parent company, Monex, has offered this product for many years. This product is being introduced to U.S. clients this year.
The Enhanced Yield product is governed by the Commodity Exchange Act that requires all participants to have a Legal Entity Identifier.
A Legal Entity Identifier (LEI) is easy to obtain and can be purchased online. Monex recommends clients obtain an LEI via www.gmeiutility.org/ .
You can visit our informational site at staging2.monexusa.com/eyd or book a meeting with an EYD expert here.