Certificate: Knock-Out

Derivative securities with leverage. The possibility of a high potential yield is balanced by the possibility of breaking through the knock-out barrier (bringing a zero yield). It is a high risk investment tool that can be used when a rate increase of the underlying asset is expected (in this case, it is a call certificate) or even when a rate decrease of the underlying asset is expected (then it is a put certificate). These types of certificates are very volatile and there is a risk of loss of all funds invested in these certificates. Other risks – see Investment Certificates.