Home About Setipa Europe
Members Media
Contact us Categorization/Education
  
Reverse convertible
Reverse convertible is a yield enhancement tool to follow rate movements in an underlying asset, usually an equity or equity index. A reverse convertible has a limited duration and provide for the expiration date at a fixed rate of return.
Market Expectations
Underlying moving sideways or slightly rising
Declining volatility
Properties
Should the underlying close below the Strike at expiry, the underlying and/or a cash amount is redeemed
Should the underlying close above the Strike at expiry, the nominal plus the coupon is paid at redemption.
The coupon is always paid, irrespective of the development of the underlying
Reduced loss potential compared to a direct investment
Larger coupons can be achieved at a greater risk if the product is based on multiple underlyings (multi-asset)
Any payouts attributable to the underlying are used in favour of the strategy
Limited profit potential (Cap)
If you want to learn more about this instrument, you can do it at www.ndx.se/education/.
Produkt kategorisering
Leverage products
Participant products
Yieldenhanced products
Reverse convertible
Maxcertificate
Expresscertificate/Autocall
Capital protected products
Copyright © SETIPA 2011 | villkor Swedish Exchange Traded Investment Products Association