Buying structured products

Structured products are a broad category of financial instruments that allow investors to gain exposure to price movements in an underlying asset, often with a relatively small initial investment. The underlying asset can be a share, index, commodity or currency pair.

Examples of structured products include turbos, warrants and certificates. These products are issued by a third party, usually a bank, and their value is derived from the performance of the underlying asset. Some structured products include built-in leverage, which can amplify both gains and losses. Investing in structured products involves risk. The maximum loss is limited to the amount invested. Carefully consider your risk appetite before investing.

When you invest directly in shares or ETFs, you own the asset or a portion of a portfolio that tracks an index. With structured products, you do not own the underlying asset itself. Instead, you gain exposure to its price movements through a product issued by a third party.

Structured products often have specific features, such as leverage, expiration dates or predefined conditions, that do not apply to direct investments. This makes them more complex than other investments and generally more suitable for experienced investors.

Capital protection is not guaranteed for structured products offered on our platform. While some structured products are designed to limit losses to the initial invested amount, others can lose their entire value.

The level of risk, costs and potential outcomes depend on the specific product and its structure. It is important to review the Key Information Document (KID) of each product before investing to understand its characteristics and risks.

Structured products can be linked to a wide range of underlying assets. Common examples include:

• Individual shares
• Stock indices
• Commodities
• Currency pairs

The available underlying assets and product types depend on the issuer and the specific structured product.

Investing in structured products involves high risk and is generally more suitable for experienced investors. While these products can offer opportunities to benefit from price movements in underlying assets, losses can occur and you may lose your entire invested amount.

Key risks to consider include:

• Leverage risk: Many structured products have built-in leverage. This means price movements in the underlying asset can be amplified, leading to larger gains but also larger losses.
• Market risk: Changes in market conditions, such as movements in equity prices, interest rates, commodity prices or currencies, can negatively affect the value of a structured product.
• Liquidity risk: Some structured products are traded infrequently. This may make it difficult to close a position at the desired time or price.
• Counterparty risk: Structured products are issued by a third party, usually a bank. If the issuer fails to meet its obligations, this can impact the value or settlement of the product.
• Knock-out and expiration risk: Certain structured products can be terminated early if a predefined knock-out level is reached or may expire with little or no remaining value.
• Currency risk: Currency fluctuations can affect returns, even if the underlying asset performs positively.

Before investing, it is important to understand how the specific structured product works and to review the Key Information Document (KID). Consider your knowledge and experience when making investment decisions. Carefully consider your risk appetite before investing.