Our Glossary
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| Call Option | A derivative instrument, in which the investor is expecting price increase. By purchasing this instrument, the investor acquires the right, but not the obligation to buy the underlying asset in the future at a price that is fixed now. |
| Cap | A technical term, which is often used in investment certificates to describe the highest possible limit that can be reached by the underlying asset. If the certificate contains a cap, its yield is restricted in advance by this highest possible limit, even if the value of the underlying asset was above this level. This cap is set by the issuing bank and is valid for the entire duration and cannot be changed. |
| Capital Market | Part of the financial market in which securities and other investment instruments are traded whose maturity is (usually) longer than one year or that have no maturity date (shares) at all. |
| Certificate: Discounted Certificate | As compared with investments in shares or with index certificates, investments in discounted certificates represent much smaller risk. This is because the investor buys the discounted certificate with a certain discount and this discount represents risk protection. Hence the name discounted certificates. Discounted certificates make it possible to earn profit on stagnating, slightly rising or even declining markets. For the risk protection, the investor must give up a certain part of potential profit that would be achieved with a significant increase in the rate of the underlying asset. Only a certain maximum yield can be achieved, which is the fee for the relatively considerable risk protection. The limit of this maximum yield is called a cap. Above this level, the investor does not participate in the yields. |
| Certificate: Knock-Out | Derivative securities with leverage. The possibility of a high potential yield is balanced by the possibility of breaking through the knock-out barrier (bringing a zero yield). It is a high risk investment tool that can be used when a rate increase of the underlying asset is expected (in this case, it is a call certificate) or even when a rate decrease of the underlying asset is expected (then it is a put certificate). These types of certificates are very volatile and there is a risk of loss of all funds invested in these certificates. Other risks – see Investment Certificates. |
| Certificate: Sprint Certificate | It allows the investors from a certain limit to participate over-proportionately in the increase of the rate of a share or index. However, this applies only within a pre-determined fixed range of rates. This means that when the rate of the underlying asset gets into this range, the investor participates in any further increase or decrease by a factor of two (2:1), until the rate of the underlying asset leaves this range. The investor takes twofold part in the strengthening of the underlying asset from the lower limit (the so-called startwert) up to the upper limit (cap). The investor does not participate in the strengthening of the underlying asset above the cap. In the event that the rate of the underlying asset gets out of this range, the investor participates again only at the ratio of 1:1 to the underlying asset. The investor receives this double yield only if the rate of the underlying asset is within this range and if the investor holds this sprint certificate up to its maturity. |
| Clearing | A system, through which the stock exchange enters as a contact partner into the relationship between the buyer and the seller and ensures the settlement of concluded transactions. |
| Client's Risk Profile | Characteristics of the person who invests. It is primarily determined by the respective person’s relation to risk, knowledge and experience in investing, intended investment horizon, property situation, as well as the level of economic education or the performance of a profession related to investment. |
| Closed-end Mutual Fund | A fund, whose property (or net business assets) is divided into a fixed number of shares. It is created for a fixed period of time and usually does not repurchase share certificates from the shareholders until the termination of the fund. |
| Collective Investment | Gathering money from an unlimited number of legal and natural persons that is not predefined for the purposes of its further use for investment based on the principle of risk diversification and in ways permitted by law. |