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What is "price movement"?

With Classic and Capped Products, you guess whether the price of the base asset will "rise" or "fall".

Example 1: Touch Product

Let's say you purchase the following product:

  • Product Type: Touch
  • Capital Protection Level: 95%
  • Product Maturity: 60 days
  • Base Asset: EURUSD
  • Price Boundary: 1.3200
  • Potential Return: 132.6%
  • Investment Level: 1,500 USD

There are 2 possible scenarios for your investment:

  1. 1

    Positive Scenario:

    The price of EURUSD reaches the boundary level of 1.3200. It doesn’t matter what happens with the price after it hits this level; all that matters is that it "touches".

    You earn 132.6% per annum on your investment.

  2. 2

    Negative Scenario:

    After 60 days, the price of EURUSD hasn’t "touched" the boundary level of 1.3200.

    You get back 95% of your investment.

Example 2: Classic Product

Let's say you purchase the following product:

  • Product Type: Classic
  • Capital Protection Level: 95%
  • Product Maturity: 180 days
  • Base Asset: Spot gold (price at purchase: 1,600 USD)
  • Price Movement: Rise
  • Investment Level: 3,400 USD
  • Participation Rate: 1.41

By purchasing this product, you are predicting that the price of gold will rise over the course of the following 180 days.

Here are 2 possible scenarios for your investment:

  1. 1

    Positive Scenario:

    After 180 days the price of gold has risen from 1,600 USD to 1,800 per ounce, a 12.5% gain. You will get back your initial investment,plus an extra 12.62% (95% + 12.5% × 1.41 = 112.62%), or 3,829.08 USD. This amounts to 25.59% per annum.

  2. 2

    Negative Scenario:

    The price of gold is down after 180 days. You get back 95% of your initial investment, or 3,230 USD.

Example 3: Capped Product

Let's say you purchase the following product:

  • Product Type: Capped
  • Capital Protection Level: 100%
  • Product Maturity: 90 days
  • Base Asset: EURUSD (rate at purchase: 1.2277)
  • Price Movement: Fall
  • Base Asset Cap Level: 1.1500
  • Participation Rate: 1.05
  • Investment Level: 3,850 USD

You choose EURUSD as your base asset. When you purchase the product, the price of EURUSD is 1.2277. You expect the price to drop.

Here are 2 possible scenarios for your investment:

  1. 1

    Positive Scenario:

    After 90 days the price of EURUSD drops to 1.0500, past the cap level of 1.1500. You earn 37.24% per annum on your investment. Even if the price had continued to drop past 1.0500, your return would have been the same. The return for your structured product maxes out at 1.1500.

    If the price of EURUSD had ended up between 1.2277 and 1.1500, the return of the product would have been calculated using the participation rate of 1.05.

  2. 2

    Negative Scenario:

    The price of EURUSD is up after 90 days. You get back 100% of your initial investment, or 3,850 USD.

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