What applies to share, index, commodity, FX Turbo open end certificates:
Price of turbo long certificate in the currency of the underlying asset = (the price of the underlying asset – the Strike value) x Multiplier
Price of turbo short certificate in the currency of the underlying asset = (the Strike value - the price of the underlying asset) x Multiplier
• If the price of the underlying asset rises, the price of TURBO LONG/SHORT rises/falls depending on the size of the leverage.
• If the client buys a TURBO LONG at the moment when the leverage has value of 10 and the price of the underlying subsequently increases by 1% (in case of unchanged Strike value), the price of the certificate in the currency of the underlying asset will increase by approximately 10%. If, after the purchase of a certificate, the price of the underlying subsequently falls by 1% (in case of unchanged Strike value), the price of the certificate in the currency of the underlying asset will fall by approximately 10%.
• TURBO LONG/SHORT certificates have a fixed realisation price (so-called Strike value) and knock-out barrier (long/short). The Strike value and knock-out barrier are continuously regulated by daily financing costs. The price of the certificate does not contain the financing costs.
• The actual value of the certificate is the difference between the price of the underlying asset and the Strike value (TURBO LONG) or the difference between the Strike value and price of the underlying asset (TURBO SHORT).
• As soon as the price of the underlying asset reaches the pre-set barrier (long barrier/short barrier, or “knock-out barrier”), TURBO LONG/SHORT certificates become worthless or only the residual value can be paid out to the holder.
What applies to share Turbo certificates:
The payout of the dividend of the underlying share has almost no effect on the certificate price. On the so-called ex-dividend date, the price of the share falls (i.e. of the underlying asset of the certificate) by the level of the dividend and the Strike value and knock-out barrier also fall by the level of the dividend.
The following applies to commodity turbo certificates for gold or silver:
If the underlying asset is the gold/silver spot price
• There is no roll-over or rolling of contracts
• The reference price for observing knock-out barriers is the quotation of gold/silver spot prices
If the underlying asset is the gold/silver futures contract
the certificate always observes the nearest gold/silver futures contract on the COMEX - New York Commodities Exchange. Of course, the Certificate has an unlimited maturity date. Therefore, there has to be regularly done so called a roll-over or rolling of contracts just before the expiry of the nearest futures contract. Rolling means that the expiring futures contract is sold and the next nearest futures contract is bought. The knock-out barrier or STRIKE price may change or usually changes during the rolling.
Simply speaking, the knock-out barrier and Strike prices are regulated so that the distance between the price of the new futures contract and new Strike price (knock-out barrier respectively) remains the same as the distance between the price of the old futures contract and the old Strike price (knock-out-barrier respectively). There is a precise description in the Final Terms of the individual Certificate.
• The reference price for observing the knock-out barrier is the final price of trading the futures contract on the stock exchange.
What applies to WTI / BRENT CRUDE / NATURAL GAS Turbo certificates:
The certificate always monitors the nearest WTI / BRENT CRUDE / NATURAL GAS futures contract on the NYMEX/ICE / NYMEX. Of course, the certificate has unlimited maturity.
Thus, the roll-over or “rolling” of the contracts must take place regularly every month shortly before the expiry of the nearest futures contract.
Roll-over usually takes place three to ten working days before expiration, but can be performed earlier by using the parameters set out in the Final Terms.
Roll-over means that an expiring futures contract is sold and the next nearest futures contract is bought.
There may be or usually is a change in the knock-out barrier and STRIKE valuer during roll-over.
Simply speaking, the values of the knock-out barriers and Strike are regulated so the difference between the new futures contract and new Strike (knock-out barrier respectively) value remains the same as the difference between the price of the old futures contract and old Strike (knock-out barrier) value. An accurate description is provided in the Final Terms of the individual certificate.
The rule for E-mini S&P500/E-mini DJI turbo certificates is that:
The certificate always monitors the nearest e-mini S&P500 / e-mini DJI futures contract on the CME/CBOT. Of course, the certificate has an unlimited maturity date. Therefore, there must be a roll-over or rolling of contracts on a regular basis every month just before the expiry of the nearest futures contract. The roll-over takes place usually three to ten working days before the expiry, but can take place even earlier within the parameters laid down in the Final Terms.
Rolling means that an expiring futures contract is sold and the very nearest futures contract is purchased. A change in knock-out barriers and STRIKE prices can and usually arises during rolling.
In simple terms, knock-our barriers and Strike prices are adjusted so the gap between the price of a new futures contract and the new Strike price (knock-out barrier respectively) remains the same as the gap between the price of the old futures contract and the old Strike price (knock-out barrier respectively). An accurate description is presented in the Final Terms of each individual certificate.
What applies to currency Turbo certificates with a fixed maturity date is:
• If the price of the underlying asset rises, the price of TURBO LONG/SHORT rises/falls depending on the size of the leverage.
• The current price of the currency certificate is affected not just by the spot price of the underlying asset, but also by the change in interest rates and the volatility of the exchange rate.
• TURBO LONG/SHORT certificates have a fixed realisation price (so-called Strike value) and knock-out barrier (long/short), which are invariable from the date of issue until the maturity of the product, or until the knock-out is performed. The financing costs are included in one amount in the price of the certificate.
• The actual value of the certificate at maturity is the difference between the price of the underlying asset and the Strike value (TURBO LONG) or the difference between the Strike value and the price of the underlying asset (TURBO SHORT).
As soon as the price of the underlying asset reaches the pre-set barrier (long barrier/short barrier, or the “knock-out barrier”), TURBO LONG/SHORT certificates become worthless or only the residual value can be paid out to the holder.