Turbo long/short
Turbo long/short allow you to benefit from market fluctuations both ways
Turbo long/short
Turbo long/short allow you to benefit from market fluctuations both ways. Turbo long benefit from rising prices and Turbo short from falling prices. Every incremental movement in the price of the underlying asset may lead to disproportionately high yields due to the leverage effect. However, while the unlimited growth potential is the upside of this specific product, the risk of losing all the capital invested is the downside. In the case of Turbo long the barrier is set below the current price of the underlying asset. Turbo short will have the barrier set above the current price of the underlying asset. There are also Turbo long/short products with and without a maturity date.
Your advantages
You will gain a disproportionately high yield potential due to low capital investment and the leverage effect.
A wide range of products is available for both rising prices (Turbo long) and falling prices (Turbo short).
With Turbo long you benefit from rising prices, while with Turbo short you benefit from falling prices.
Turbo long/short is an ideal tool for active, market-oriented investors, who can benefit from short-term market fluctuations thanks to the leverage effect.
Turbo short is therefore one of the few tools on the stock market that allows you to benefit from falling markets.
You should know
The leverage effect can result in disproportionately high losses and you may lose your entire investment.
If the product is not hedged against currency risk, its performance is positively or negatively affected by the development of the exchange rate between the currency of the product (CZK) and the currency in which its underlying asset is traded. If the CZK strengthens, the price falls, if the CZK weakens, the price rises.
An investor should not base his investment decision solely on this document, as he may be outside the target market of the investment instrument and the investment instrument listed in this document may not be suitable for all investors.
The investors bear the risk of the issuer (Erste Group Bank AG)
What else you should know about investments in the certificates
Turbo long/short contain a leverage effect.
… rising markets?
On rising markets the price of the Turbo long/short rises/falls at a disproportionately high level depending on the leverage selected.
… stable markets?
On stable markets the price of Turbo long/short is affected by the financing costs, which could decrease or increase the price of the security.
… falling markets?
On falling markets the price of Turbo long/short falls/rises at a disproportionately high level depending on the leverage selected.
The price for a Turbo long certificate in the currency of the underlying asset = (underlying asset price – Strike price) x ratio
The price of the Turbo short certificate in the currency of the underlying asset = (Strike price – underlying asset price) x ratio
• If the underlying asset price rises, the TURBO LONG/SHORT price rises/falls depending on the size of the leverage.
• If the client buys a TURBO LONG certificate at the time when the leverage is of the value 10 and the underlying asset price subsequently rises by 1% (in an unchanged Strike price), the certificate price in the underlying asset currency will rise by about 10%. If after buying the certificate the underlying asset price subsequently falls by 1% (in the unchanged Strike price), the certificate price in the underlying asset currency will fall by about 10%.
• TURBO LONG/SHORT certificates have a set implementation price (so-called Strike price) and a (long/short) knock-out barrier. The Strike price and knock-out barrier are continuously modified by the daily financing costs. The certificate price does not contain financing costs.
• The real value of the certificate is the difference of the underlying asset price and the Strike price (TURBO LONG) or the difference of the Strike price and the underlying asset price (TURBO SHORT).
• As soon as the underlying asset price reaches the pre-set barrier (long barrier/short barrier, or “knock-out barrier”), TURBO LONG/SHORT certificates become worthless, or the holder can be paid out only the residual value.
Payout of dividends of underlying stock has almost no effect on the certificate price. On the so-called ex-dividend date the stock price will fall (i.e. the underlying asset of the certificate) by the amount of the dividend and the Strike price and knock-out barrier will also fall by the amount of the dividend.
If the underlying asset is the gold/silver spot price
• There is no so-called roll-over or rolling contract
• The reference price for tracking knock-out barriers is the gold/silver spot price quotation
If the underlying asset is a gold/silver futures contract
The certificate always tracks the nearest gold/silver futures contract on the COMEX - New York Commodities Exchange. Of course, the certificate has an unlimited maturity date. Therefore, the so-called roll-over or rolling contract must take place regularly shortly before the expiry of the nearest futures contract. Rolling means that the expiring futures contract is sold and the nearest futures contract is purchased. During rolling a change to the knock-out barrier and STRIKE price may arise and usually arises.
Simply speaking, the knock-out barrier and Strike price are modified so the distance between the price of the new futures contract and the new Strike price (or knock-out barrier) remains the same as the distance between the price of the old futures contract and the old Strike price (or knock-out barrier). An accurate description is provided in the Final Terms of the individual certificate.
• The reference price for tracking the knock-out barrier is the final price of the implemented transaction of the futures contract on the exchange.
The certificate always tracks the nearest WTI/BRENT CRUDE/NATURAL GAS futures contract on the NYMEX/ICE/NYMEX exchange. Of course, the certificate has an unlimited maturity date. Therefore, the so-called roll-over or rolling contract must take place regularly every month shortly before the expiry of the nearest futures contract. The roll-over takes place usually three to ten working days before expiry, but may also take place earlier as part of the parameters set in the Final Terms.
Rolling means that the expiring futures contract is sold and the nearest futures contract is purchased. During rolling a change to the knock-out barrier and STRIKE price may arise and usually arises.
Simply speaking, the knock-out barrier and Strike prices are modified so the distance between the price of the new futures contract and the new Strike price (or knock-out barrier) remains the same as the distance between the price of the old futures contract and the old Strike price (or knock-out barrier). An accurate description is provided in the Final Terms of the individual certificate.
The certificate always tracks the nearest e-mini S&P500 / e-mini DJI futures contract on the CME/CBT exchange. Of course, the certificate has an unlimited maturity date. Therefore, the so-called roll-over or rolling contract must take place regularly every month shortly before the expiry of the nearest futures contract. The roll-over takes place usually three to ten working days before expiry, but may also take place earlier as part of the parameters set in the Final Terms.
Rolling means that the expiring futures contract is sold and the nearest futures contract is purchased. During rolling a change to the knock-out barrier and STRIKE price may arise and usually arises.
Simply speaking, the knock-out barrier and Strike price are modified so the distance between the price of the new futures contract and the new Strike price (or knock-out barrier) remains the same as the distance between the price of the old futures contract and the old Strike price (or knock-out barrier). An accurate description is provided in the Final Terms of the individual certificate.
Chart: profit/loss
Explanations:
Blue line – turbo long
Purple line – turbo short
Green line – underlying asset
Terms of purchase and sale of equities, ETFs and certificates
Taxation of investment yields
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