The prices shown in the chart above are indicative only. The prices above may not be the prices at which investors can buy or sell the Product or the Underlying. Historical pricing is not a reliable indicator of future pricing and does not take into account potential third party costs, fees or charges. Historical pricing is not based on simulated or hypothetical data.
Vonovia SE DISCOUNT 15/03/2019
A Discount Certificate offers the holder the opportunity to invest in an underlying asset (the “underlyer”) at a discount to its prevailing price. To achieve this discount, the investor forgoes price increases of the underlyer above a pre-defined threshold, the “Cap”. This discount partially protects the holder against a falling in the price of the underlyer. It also offers a sideways yield that the investor achieves even if the underlyer does not move in price as the holder will obtain the full price of the underlyer (subject to the Cap) .
For example: The underlyer is currently trading at 100 Euros. The investor pays 90 Euros for a Discount Certificate which has a term of 1 year and a Cap of 100 Euros. Therefore the investor receives a discount of 10%.
At final valuation after 1 year, the holder will receive the lower of (i) the price of the underlyer at final valuation date, and (ii) the Cap. See examples of potential payoff scenarios below:
(a) Underlyer trades at zero at final valuation:
The holder will receive zero and will have made a loss of 100% on the product and on the underlyer.
(b) Underlyer trades at 60 Euros at final valuation:
The holder will receive 60 Euros and will have made a loss of 33% on the product compared to a loss of 40% on the underlyer.
(c) Underlyer trades at 90 Euros at final valuation:
The client will receive 90 Euros and will have made no profit or loss on the product compared to a loss of 10% on the underlyer.
(d) Underlyer trades at 100 Euros at final valuation:
The client will receive 100 Euros and will have made a profit of 11% on the product compared to no profit or loss on the underlyer.
(e) Underlyer trades at 150 Euros at final valuation:
The client will receive 100 Euros and would have made a profit of 11% on the product compared to a profit of 50% on the underlyer.
In most cases, a Discount Certificate is less volatile than its underlyer. The lower the underlyer trades below the Cap, the more influence the price of the underlyer has on the price of the Discount Certificate. The higher the underlyer trades above the Cap, the less influence the price of the underlyer has on the price of the Discount Certificate.
In the case of rising underlyer prices, the Discount Certificate tends to rise in price, up to the Cap. Conversely, in the case of falling underlying prices, the price of the Discount Certificate tends to fall.
Investors should be aware that even if the underlyer trades considerably above the Cap, the Discount Certificate will still trade at a discount to the underlyer price and below the Cap, therefore the holder will not benefit from the full price rise of the underlyer. The discount will only disappear over time until final valuation of the product.
Any amount payable under a Discount Certificate will be paid five business days after the final valuation.
Your capital invested will always be at risk while holding the product.
For further information on the mechanics of Discount Certificates, please refer to the Final Terms document together with the Base Prospectus.
Investing in products can be risky and you may lose a significant proportion, or all, of your capital invested. Please ensure that you read and understand the information contained in the Base Prospectus and the relevant Final Terms and the additional information on this website, particularly the section “Risks” of this website before making any decision to purchase any product.
*The Guarantor has guaranteed that if the Issuer does not pay any sum due or perform any other obligation in respect of a Product when such sum or performance is due, the Guarantor will pay that sum or perform that obligation.
Historical prices are not a reliable indicator of future prices and investors may get back less than the amount invested. Any information provided herein is for informational purposes only and is subject to change without notice. It is not intended as a recommendation of or an offer or solicitation to purchase or sell any financial product or service or as a recommendation of an investment advisor. Users should consult their own advisors regarding legal, tax, accounting or any other aspects including suitability implications of the product for their particular circumstances.