Interest rate floor

About the product

Interest rate option Floor is a contract providing the option buyer with the right to demand the option seller (issuer) to perform the option and pay the amount of cash settlement of the interest period (floorlet), in case where in a given interest period the fixed Floor option execution rate is higher than the reference rate.


  • Purchase of the Floor option helps secure profitability of an investment while retaining an opportunity to take part in the increase of interest rates.
  • Option buyer has the opportunity to generate unlimited yield limiting the potential loss to the level of option premium paid.
  • Opportunity to individually fix transaction parameters and fix the option execution rate at any level.
  • Transaction valuation during the transaction term cannot be negative relative to prevailing market interest rates (spot and forward) i.e. early closure of transaction does not generate Client's liability due to the Bank.


  • Purchase of option is linked with the duty to pay option premium, which – conditional upon option parameters – may become a significant cost for the buyer.
  • In effect of change of market conditions (e.g. decline of spot and forward interest rates), in case of early transaction closure, the amount of option premium received may be significantly lower than option premium paid on the transaction conclusion date.


All and any information contained in this commercial publication is for information purposes only and does not constitute an offer, or a recommendation or an invitation addressed to anyone (or any group of persons whatsoever) to conclude a transaction involving the financial instruments presented herein. In particular the information contained in this publication does not constitute an offer in the meaning of the Civil Code of 23rd April 1964 nor is it a service of investment, financial, tax, legal or any other advice.

Any investment decision should be taken with consideration of information contained in Bylaws for concluding treasury transactions in Bank Millennium SA, Bylaws for Spot, Forward and Derivative Transactions in Bank Millennium SA, Bylaws for transactions involving securities, term deposits and bi-currency investments in Bank Millennium SA and not exclusively on the basis of the abbreviated description contained herein. The above documents are available in an outlet of the Bank.

This publication contains the position of Bank Millennium S.A. ("Bank") expressed on the basis of its own assessment of facts, which are important to the Bank as well as relevant legal provisions. The Bank assures that it made due efforts in order that the information contained in this publication is reliable and based on authoritative sources, however the Bank cannot guarantee that information obtained from sources outside the Bank is reliable, complete and up-to-date. Additionally the Bank informs that information and analyses contained in this publication are based on information coming from public sources, which were not verified independently by the Bank and moreover may be subject to periodical changes.

The Bank shall not be held liable in any way for the financial consequences of performance by the customer of transactions on the financial instruments described herein. At the same time the Bank reserves the possibility of making changes to the form as well as content of this publication, at any time and without notice.

The risk of using the information contained herein, in particular as regards taking investment decisions on its basis, shall be borne exclusively by its recipient. Financial transactions involve risk, presented in detail in the “Description of risks involved with financial instruments and products offered in the Biznes and Corporate Banking segments in Bank Millennium S.A.”, available in the Bank's outlets and on its website

Whoever acquires a financial instrument, accepts and bears responsibility on account of tax liabilities imposed by valid regulations. With a view to the above risks and circumstances, customers of the Bank should have essential knowledge and experience to assess the nature of every contemplated transaction and risks connected with it. In case of any doubts customers should resort to the services of a tax, legal or investment advisor.

The Bank shall provide all and any additional information reasonably requested by the customer, in order to enable him to assess the risks and nature of the transaction. Conclusion by the customer of transactions involving financial instruments is the basis for consideration that the customer has read the terms and conditions of the transaction as well as the related risk and has accepted them.

Dissemination and distribution of some financial instruments or products as well as trading in them may be subject to restrictions with respect to some persons and states, in keeping with relevant legislation. It is for the customer to demonstrate legal capacity and authority to invest in a particular financial instrument. Financial instruments may be offered and traded only in compliance with appropriate legal regulations.

Information contained herein is provided to the exclusive attention of its recipient. The recipient is not authorised to copy and send or furnish it to third persons in any way, be it in whole or in part (other than providing it to his professional advisors) without the Bank’s prior written consent.

Markets in Financial Instruments Directive

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Corporate branch

Get detailed information about Bank Millennium products by contacting Advisors or Treasury Department's Product Specialists/Dealers in the Corporate Banking network.

Contact with Advisor

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