Leverage Products

Leverage products allow investors to participate to a disproportionately high degree in the performance of the underlying while themselves putting little money down. The leverage effect means that the risk attached to these products is correspondingly higher than that of a direct investment. Leverage products are thus suitable only for investors with a high risk profile.

Your Market expectation

• Call warrant: Price increase in underlying; increasing volatility
• Put warrant: Price decline in underlying; increasing volatility

Characteristics

• Lower amount of invested capital leverages gains/losses on underlying
• Suitable for short-term speculation or hedging purposes
• Value influenced by both value of underlying and degree of volatility
• Regular monitoring required
• Daily loss of time value, increasing as expiration date approaches
• Total loss possible, but limited to amount invested