What is an autocall note?

What is an autocall note?

AutoCallable Notes are short-term market-linked investments offering an above-market coupon if automatically matured prior to the scheduled maturity date. The product is automatically matured (“auto-called”) if the reference asset is at or above its initial level on a predetermined observation date.

How does an autocall work?

An autocallable is a popular structured product that pays a high coupon if the underlying – typically equity indexes or single stocks – passes an upside barrier, at which point it automatically matures and the investor’s principal is returned.

What is an autocall investment?

Autocall investments (or ‘Autocalls’) are capital-at-risk investments that can be linked to a variety of underlying asset(s). Early maturity occurs automatically subject to the asset being at or above a certain level (often referred to as the “Barrier Level” or “Autocall Barrier”) on a given date.

What is autocall trigger level?

Autocall Trigger Level means, in respect of an Autocall Observation Date or an Autocall Observation Period (as applicable) and an Underlying, an amount equal to the percentage of either (a) the Initial Fixing Level or (b) the Strike Level (as specified in the Issue Terms) of such Underlying as specified in respect of …

What is coupon barrier?

Coupon Barrier Autocall Notes offer contingent periodic coupons with the potential for yield, in addition to offering contingent downside protection. If held to maturity, the CoBa Notes may offer higher returns than the underlying* where the underlying performs moderately.

Are structured notes safe?

Structured notes are often too risky and complicated for individual investors. This risk arises when the underlying derivative becomes volatile. That can happen with equity prices, interest rates, commodity prices, and foreign exchange rates. Low liquidity is often a problem for holders of structured notes.

What are barrier notes?

What are Barrier Notes? Barrier Notes allow investors to express a view on whether a particular reference rate will be greater than a set reference barrier strike rate at a specified time in the future.

What is a barrier in a structured product?

Minimum or Maximum Interest Amount; Barriers: In this case, the particular product will have a specified minimum and/or maximum interest, or cap, amount that may be paid at maturity.

What are coupon notes?

What are FCNs? FCNs are a type of equity-based structured note. They provide regular coupon payments to the investor regardless of market conditions. FCNs are sophisticated investment products that carry significant risks and are not suitable for investors who do not comprehend the product or are risk averse.

What is barrier pricing?

The price at which a barrier option becomes active or inactive. For example, a contract may have a strike price of $35, but it may only be exercised if the spot price of the underlying asset falls below $40 at some point during the life of the option. …

What is the risk of structured notes?

Structured notes also suffer from higher default risk than their underlying debt obligations and derivatives. If the issuer of the note defaults, the entire value of the investment could be lost. Investors can reduce this default risk by buying debt and derivatives directly.

What is the standard Autocall payoff?

The standard autocall payoff has several coupon/autocall dates and a down and in put at maturity. The coupons/autocalls for the client are like a strip of long digital calls, because he wants to be above the coupon/autocall barrier to get the coupon / to autocall. The client is short a DI put at maturity.

When does the buyer receive the Autocall coupon?

So in the resulting payoff, the buyer receives the autocall coupon whenever the stock is above the coupon barrier and the trade has not been autocalled.

Why are coupons/autocalls like a strip of long digital calls?

The coupons/autocalls for the client are like a strip of long digital calls, because he wants to be above the coupon/autocall barrier to get the coupon / to autocall. The client is short a DI put at maturity.

How do I request a payoff statement?

Requesting a payoff statement is commonly the first step in paying off a loan. Different types of lenders will have varying formats for payoff statements. Online lenders will generally provide borrowers with a payoff quote that details the exact amount a borrower will need to pay on a specific day to repay the loan early.