•If the index climbs to EUR 5,500 (+10%), the value of the certificate also increases by 10% and will be EUR 550. The initial investment will rise to EUR 1,100. •If the index declines to EUR 4,000 (-20%) the value of the certificate declines similarly and will be EUR 400. The investment will fall to EUR 800. •For this type of product, it is therefore quite straightforward to calculate the value of a certificate at any point in time.
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Other structured products•As the structured products market evolves, more innovative products are available with ever increasing variations in terms and structure. •Some instruments will fall into more than one of the broad categories we have discussed.
The benefits of using structured products •Simple and cost effective access to a wide range of markets •Geared or ungeared performance •Potential return whether the performance of the underlying asset is static, bullish or bearish •Built-in currency risk management features in some products •Maximum potential loss is known •No margin calls and no dedicated account required •Traded in the same way as ordinary shares •continuous on-screen pricing throughout the day •Market makers are committed to providing a liquid market so that investors can trade in and out of their position before maturity