Erste Group Participation certificate DAX FUTURE Open end

The price of the DAX participation certificate = price of the next DAX futures contract x RATIO x EUR to CZK. 

Therefore, the performance of this DAX participation certificate depends on the performance of the DAX futures contract, RATIO and EUR to CZK FX rate. The certificate always observes the next DAX futures contract on the EUREX Exchange. Of course, this is a perpetual maturity certificate. Therefore, every quarter, shortly before the expiry of the next futures contract, there is a roll-over, i.e. the so-called roll-over of contracts. 

The roll-over means that the expiring futures contract is sold and the very next futures contract is purchased. There may be and usually is a change to the RATIO during the roll-over. One the one hand, the roll-over is burdened with the selling and buying costs and on the other there could be loss or profit. 

Profit occurs during the roll-over when the price of the expiring futures contract is higher than the price of the new futures contract (so called backwardation). More can be invested in the new futures contract and the RATIO rises. 

Loss occurs during the roll-over when the price of the expiring futures contract is lower than the price of the new futures contract (so called contango). Therefore, less can be invested in the new futures contract and the RATIO falls. 

The higher the RATIO the more the client participates in the increase of the DAX futures contract. 

The rise of the EUR to CZK rate (the crown weakening against the EUR) encourages the growth of the price of the DAX certificate. In turn, the fall of the EUR to CZK rate (the crown strengthening against the EUR) encourages the fall of the price of the DAX certificate.