Vontobel Open End Knock-Out Warrants
Knock-Out warrants are very flexible financial instruments, because investors can use these products for bull markets (Bull or Long) as well as for bear markets (Bear or Short).
Investors could use these events to use leverage certificates and focus either on strong bullish or bearish market trends and use leverage in order to generate a strong and leveraged participation on the respective market movement. Or investors use bear certificates or Turbo Short in order to build a portfolio insurance. Most people have insurances for everything: live insurance, car insurance, house insurance, casualty insurance etc. But only a few people know that portfolio insurances are also available. If markets collapse or the sentiment gets negative, investors should have an insurance for their equity or fund portfolio.
Most of the Finish investors use Knock-Out Warrants or Turbo Certificates in order to participate either on rising or falling markets. They prefer from a short and midterm perspective Turbo Short Certificates, participating with a small amount of capital and with a decent leverage compared to a direct investment. However, Turbo Shorts could also be on option for portfolio insurance.
Most of the Finnish investors use Knock-Out Warrants or Turbo Certificates in order to participate either on rising or falling markets. They prefer from a short and midterm perspective Turbo Short Certificates, participating with a small amount of capital and with a decent leverage compared to a direct investment. However, Turbo Shorts could also be on option for portfolio insurance.
The insurance is dependent from the portfolio constitution. People can insure single stock positions but also a DAX or OMX like portfolio. Compared to Stop-Loss Orders, investors stay invested in volatile market phases. How does this work? Investors participate with a Turbo Short on decreasing markets. The Turbo Short increases in value, if the respective underlying decreases. The lower the leverage the lower the risk that the Turbo will be knocked out if markets increase and the expected market expectation doesn't fulfill. Concerning the time horizon of the insurance, investors are quite flexible, because the turbos are open end and investors are able to manage the insurance and costs individually.
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Investors seeking portfolio insurance must however consider that Turbo Shorts are very risky instruments and that in case of a knock-out of the Turbo Shorts the capital invested for insurance will be totally lost.
This information does not constitute a financial analysis, but product advertisement. Thus it does not meet the legal requirements to ensure the impartiality of financial analysis and is not subject to trade prohibition before the publication of a financial analysis.
For detailed information, particularly regarding the structure and the risks associated with an investment in the derivative financial instruments, prospective investors should read the Base Prospectus, which is available together with the Final Terms and any supplement to the Base Prospectus in electronic form on the issuer’s website: http://certificates.vontobel.com. Additionally, the Base Prospectus, any supplements to the Base Prospectus and the Final Terms are available in printed form, free of charge, at the registered office of the issuer: Vontobel Financial Products GmbH, Bockenheimer Landstrasse 24, 60323 Frankfurt am Main, Germany.
Investors should consider the applicable selling restrictions.
Companies of the Vontobel group may directly or indirectly pay commissions in varying amounts to third parties (e.g. brokers) in connection with the public offer and the distribution of the derivative financial instruments. Further information is available upon request from your distribution partner.
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