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2200 Warrant with knock-out

Product type number as specified by the Swiss Structured Products Association (SSPA): 2200

Market expectations
  • Knock-out warrant (call): rising underlying
  • Knock-out warrant (put): declining underlying
Characteristics
  • A small amount of capital employed produces a leverage effect over the underlying.
  • This product involves an increased risk of sustaining a total loss (limited to the amount of capital employed).
  • Knock-out warrants immediately expire worthless if the barrier is touched during the term.
  • They are suitable for short-term speculation or hedging.
  • Compared with a warrant, volatility has little effect and the relevant loss of time value is also smaller.
  • Regular monitoring is required.
Opportunities
  • The return on the warrant is disproportionately high compared to a direct investment in the underlying. Warrants are suitable as an investment, for speculation, or for hedging.
Risks
  • If the underlying touches or falls below (call) or exceeds (put) the barrier during the term, the knock-out warrant expires worthless.
  • The knock-out call warrant is worthless if the price of the underlying is below the strike price upon expiry.
  • The knock-out put warrant is worthless if the price of the underlying is above the strike price upon expiry.
  • The loss potential is limited to the purchase price.
Repayment terms
  • If the price of the underlying on expiry is higher than the strike and the underlying has never touched or fallen below the barrier during the term, you have the right to purchase the underlying at the strike price. (Call)
  • If the price of the underlying on expiry is lower than the strike and the underlying has never touched or exceeded the barrier during the term, you have the right to purchase the underlying at the strike price. (Put)
  • The number of underlyings sold/bought under the option contract is determined by the exercise ratio.
  • If you do not wish to buy or sell the underlying upon expiry, you can sell the warrant on the stock exchange.
  • If the underlying touches or falls below the barrier during the term, the knock-out call warrant expires worthless.
  • If the underlying touches or exceeds the barrier during the term, the knock-out put warrant expires worthless.
  • The knock-out call warrant is also worthless if the price of the underlying is below the strike price upon expiry.
  • The knock-out put warrant is also worthless if the price of the underlying is above the strike price upon expiry.
Pay-off diagram upon expiry

2200 Pay-off

Examples upon expiry

A Product & scenarios Call Warrant with Knock-Out

B Product & scenarios Put Warrant with Knock-Out

Taxes Call und Put
Swiss income tax No
Swiss withholding tax No
Swiss stamp tax No
EU tax on interest No
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