Express certificates offer the opportunity for redemption with an attractive return even if the price of the underlying asset rises only slightly or moves sideways. In addition, a safety buffer protects the invested principal amount from potential price losses should the price of the underlying asset fall below a certain threshold. The term is typically between one and four years.
How do express certificates work?
Express certificates have a relatively simple structure and offer the chance of a payout with an attractive return before the end of the total term, as well as additional protection through a built-in safety buffer. The return depends on the performance of the underlying asset – usually stocks or indices.
What to keep in mind
If the redemption level of the underlying asset is not reached on the defined valuation dates throughout the entire term, several redemption options are possible on the final valuation date. In most cases, a 100 percent repayment of the face value is agreed upon – provided that the underlying asset’s price is above a certain barrier on the final valuation date. If the price does not reach this level, repayment is made on a 1:1 basis in line with the underlying asset’s performance. Losses are therefore not ruled out.
