The bonus level which determines its payout is set above the current price of the underlying instrument for the issue of the certificate. The protective barrier is set below the initial value. If a specific certificate also has a cap (maximum payout), this cap is set at the bonus level or above it. The current price of the certificate will develop depending on the actual price of the underlying asset and in the case of a currency unsecured certificate (non-quanto certificate) also on the current exchange rate of the Czech crown to the currency of the underlying asset (if the underlying asset is in a currency different than CZK). The price of the underlying asset will be observed continuously until the maturity date.
The following two cases may arise:
If the price of the underlying asset does not fall to or under the value of the barrier even once during the lifetime of the certificate, the Bonus Value will be used for the payout. The client will thus receive the Maximum Amount which will be calculated by multiplying the Bonus Value by the Ratio. This applies for a currency secured certificate (quanto certificate). In the case of a currency unsecured certificate (non-quanto certificate) the Maximum Amount will stated in the currency of the underlying asset and will be converted on the maturity date by the current exchange rate from the currency of the underlying asset to CZK (if the underlying asset is in a currency different than CZK). If the price of the underlying asset at the maturity date is higher than the Bonus Value then this price will be used for the payout, but only to the level of the CAP value. The CAP value determines the maximum value used for the payout. Thus if the CAP value = to the Bonus Value, then in this case the Bonus Value is also used for the payout and not the price of the underlying asset.
If during the lifetime of the certificate the price of the underlying asset falls to the level of the barrier or below it, the bonus will not be paid out. The current value of the underlying asset will be used for the payout. Thus the client will receive the amount which will be calculated by multiplying the current value of the underlying asset by the Ratio. This applies for the currency secured certificate (quanto certificate). In the case of a currency unsecured certificate (non-quanto certificate) this amount will be converted on the maturity date by the current exchange rate from the currency of the underlying asset to CZK (if the underlying asset is in a currency different than CZK). |
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