What certificate on options a certificate?
Certificates are financial instruments characterized by a wide variety of risk-return profiles, and able to provide to the investors a suitable financial solutions related to every different investment strategy. Investment Certificates are securitized derivatives, which means a combinations of financial contracts embodied in single securities, which can be traded like stocks.
These products are issued by financial institutions which assume the obligation to pay the due cash flows, according to what stated in the related prospectus. A single certificate presents different characteristics, certificate on options example: directionality of the underlying asset exposition to certificate on options and negative movements cash flows during the life of the instrument coupons early redemption with premium for the investor full, partial, or conditioned capital protection of the initial amount invested redemption premium at maturity This diversity of profiles can be achieved because the investor renounces, with the purchase of a certificate, to the dividends paid by the underlying asset during the life of the certificate.
The purchasing of a certificate is equivalent to an investment in call or put options.
Certificates presenting this characteristic have a conditional capital protection. On the other hand, if the barrier level is surpassed, the owner of the certificate will be fully exposed to the movements in the price of the underlying asset, let them be either upwards or downwards.