Open End Turbo Put Warrant
Underlying: General Electric SSPA/EUSIPA Product Type: Knock-Out Warrants (2200) Valor: 30497694 / ISIN: CH0304976944
|Spread||0.02 CHF / 4.51%|
|Days to expiry||--|
|Trading place||Swiss DOTS|
Tax information Switzerland
|Swiss income tax||No|
|Last trading date||Open end|
|Knock-out touch date||Not touched|
|Last update||18.01.2017 03:39:23|
|Underlying price1)||31.27 USD|
|Distance to knock-out1)||4.03062 USD (12.89%)|
UBS Turbo Warrants
In the case of UBS Turbo Warrants, also known as Turbos, the name says it all. With these investment instruments, investors who are willing to take risks can shift into turbo and considerably increase their yield potential. Call Turbos speculate on rising and Put Turbos on falling prices of the underlying asset (e.g. equities, indices, currency pairs, interest rates, commodities). During the term, the strike for Call Turbos is below the price of the underlying asset and for Put Turbos it is above it.
Turbos are less expensive than Vanilla Warrants and thus generally provide more leverage. However, investors have to pay a price for the opportunity to earn higher returns in the form of increased risk, as the strike also acts as a stop loss marker and is therefore also referred to as a knock-out barrier. This barrier should not be reached or exceeded. If an investor bets on rising prices by buying a Turbo Call Warrant and the underlying asset hits or breaches the barrier, the Turbo Call Warrant expires immediately without value – its term ends prematurely. A Turbo Put Warrant on the other hand is geared towards falling markets. If the underlying asset belies expectations and moves to or above the barrier, the Turbo Warrant has to be written off as worthless. In other words, in the case of UBS Turbos, breach of a barrier amounts to a total loss of the capital invested.
In addition, investors must take into consideration the issuer risk, since loss of the invested capital could occur if UBS AG becomes insolvent, regardless of the performance of the underlying asset and other market parameters.
You can find a more detailed product description in our brochure "Knowledge in a nutshell".