As long as the underlying never trades at or above the barrier level at any time during the lifetime of the product, you participate at 100% in the positive performance of the underlying. Therefore, if the underlying closes slightly below (without touching) the barrier level, you will achieve the maximum return.
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Examplary Underlying: Commodity
In general, Commodity Barrier Capital Protected Certificates (Dolphin CPN) can provide a participation in the positive performance of an underlying, as long as no barrier event occurs. The potential rebate payment partially compensates for the risk of not benefiting from a participation in the underlying in bullish market conditions. Additionally, this Commodity Barrier Capital Protected Certificate offers full capital protection by the issuer / guarantor on the redemption date.
Il profilo di distribuzione ha il solo scopo illustrativo e si basa sull’ipotesi che non si verifichi una cessazione eccezionale in base alla documentazione del prodotto dell’emittente.
Caratteristiche principali di un esempio di prodotto
Currency
USD, cash settled
Term
2 years
Return
100% of positive performance of the underlying, up to the barrier of 140%, 5% Rebate in case of barrier event, Rebate: 5%, payable at maturity in case of a barrier event
Participation
100%
Capital
Floor at 100%
You may consider an investment in this product, if
- You are familiar with both structured products and commodity markets
- You intend to be invested in this product until its redemption date
- You are comfortable that the capital protection applies on the redemption date only
- You do not expect the barrier level of the underlying to be touched or breached at any time on any exchange business day until and including the expiration date (barrier event)
- You wish to be invested in the investment currency of the product. If your reference currency is not equal to the investment currency of the product, the return may increase or decrease in reference currency terms as a result of exchange rate fluctuations
Summary of main product-specific benefits
Summary of main product-specific risks
- (Enhanced) participation up to a certain barrier level
- Full capital protection on the redemption date
- Rebate payment partially compensates for the opportunity cost of not benefiting from a strong performance of the underlying
Summary of main product-specific risks
- Capital protection applies on the redemption date only
- No participation in the positive performance of the underlying in case of a barrier event
- You are fully exposed to the default risk of the issuer
Scenario Analysis
Return on investment (ROI) on the redemption date
Assumptions: Underlying Brent Crude Oil, Reference price USD 64.38, strike level 100%, capital protection 100%, participation 100%, barrier level 140%, rebate 5%
| Underlying on the expiration date |
ROI (redemption + coupon) if barrier event does not occur |
ROI (redemption + coupon) if barrier event occurs |
|
|---|---|---|---|
| USD | Chg % | ||
| 69.57 | +50.00% | n.a. | 5.00% (105.00%) |
| 90.13 | +40.00% | n.a. | 5.00% (105.00%) |
| 89.49 | +39.00% | 39.00% (139.00%) | 5.00% (105.00%) |
| 83.69 | +30.00% | 30.00% (130.00%) | 5.00% (105.00%) |
| 77.26 | +20.00% | 20.00% (120.00%) | 5.00% (105.00%) |
| 70.82 | +10.00% | 10.00% (110.00%) | 5.00% (105.00%) |
| 64.38 | 0.00% | 0.00% (100.00%) | 5.00% (105.00%) |
| 57.94 | -10.00% | 0.00% (100.00%) | 5.00% (105.00%) |
| 51.50 | -20.00% | 0.00% (100.00%) | 5.00% (105.00%) |
| 45.07 | -30.00% | 0.00% (100.00%) | 5.00% (105.00%) |
| 38.63 | -40.00% | 0.00% (100.00%) | 5.00% (105.00%) |
| 32.19 | -50.00% | 0.00% (100.00%) | 5.00% (105.00%) |