Structured Products

Structured products combine conventional investments, such as bonds, with derivatives such as options or swaps. This creates a predefined payoff profile linked to an underlying. Unlike a direct share investment, gains and losses are not necessarily proportional because coupons, barriers, caps or capital protection can change the result.

A structured product may reference an individual share, basket, equity index, currency, commodity, interest rate or another financial instrument. Its value depends on the underlying and conditions including strike price, term, barriers, caps and coupon payments. See understanding structured products.

Structured products can address different market scenarios. A participation product can provide exposure when an investor expects an underlying to rise. A yield-enhancement product may suit an expectation of stable or range-bound markets, with limited upside accepted for a coupon or discount. Capital-protection products can combine defined protection at maturity with partial participation. Leverage products can amplify rising or falling moves but substantially increase risk.

The four principal categories are participation, yield enhancement, capital protection and leverage. Examples include tracker certificates; barrier reverse convertibles and discount certificates; capital-protection products; and warrants, mini-futures, knock-out warrants or factor certificates. See the SIX structured-products overview.

Investors should examine the underlying, barriers, strike price, return cap, maturity and early-redemption conditions. They are also exposed to issuer credit risk. Capital protection normally applies only according to the conditions and at maturity; selling earlier may result in a loss. Barrier events and leverage can amplify losses. Read about the opportunities and risks.

The regular segment opens at 09:15 CET and ends at 17:15 CET. Products admitted to the extended trading hours segment can be traded from 08:00 to 21:45 CET. Issuers determine whether products trade in the regular or extended segment, so investors must check the individual product.