Categorization
Capital Protection
Yield Enhancement
Participation
Leveraged
The categorization model consists of four main categories.

Each category contains a varying number of product types, demonstrating how a product functions by using a payoff diagram. The descriptions provide information on the investor's market expectations as well as product-specific characteristics.

A capital protection product guarantees the investor a certain minimum repayment (usually 100%) of the invested amount at the end of its term.

It should be noted, however, that the price calculated during the term of the derivative may be below the capital protection level. Depending on how they are structured, the upside potential offered by capital protection products may be either capped or unlimited.

Yield-enhancement

products offer investors the chance of a higher yield than they would earn on a direct investment in the underlying when markets are moving slightly higher/lower or trending sideways. Examples here include common instruments such as discount certificates, reverse convertibles and barrier reverse convertibles.

Participation products generally combine a certain number of defined individual securities (a basket) or an index into a single security.

Participation products often fluctuate in a 1:1 relationship to the underlying (delta =1). At maturity, the closing index value or closing price of the basket is paid out. As a rule, participation products offer an opportunity to achieve broad risk diversification even with smaller investment amounts, while also keeping administrative costs low.

Leverage products

allow investors to participate to a disproportionately high degree in the performance of the underlying while themselves putting little money down. The leverage effect means that the risk attached to these products is correspondingly higher than that of a direct investment. Leverage products are thus suitable only for investors with a high risk profile.

 

 

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The SILC Group provides a overview of structures issued by various product providers. We aim for transparency, liquidity, sustainability and security. We provide service for the live time of these structures..


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