What are Structured Products

Structured products transform investment strategies, allowing investors to customize payouts to align with specific views and risk preferences. Unlike traditional stock investments, where gains and losses typically follow a straightforward 1:1 ratio (upside gains mirror downside risks), structured products use derivatives and options to tailor returns in ways that match an investor’s risk tolerance and market outlook.

Tailored to YOUR needs

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1. Customized Payouts with Derivatives

Structured products utilize derivatives, including options, to create unique payout structures. This approach allows investors to limit downside exposure, enhance upside potential, or even generate returns in sideways markets. For example, an investor can purchase a structured product with a “buffer” that limits losses if the market declines within a certain range, while still capturing some upside if the market rises. Through exotic options, such as barrier or knock-in options, investors can build highly tailored products that reflect their precise market expectations, whether that’s slight upward movement, significant volatility, or stability in specific price ranges.

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2. Combining Fixed Income and Equity (or Other Assets)

Structured products also blend different asset classes—often fixed income with equity, commodities, or other assets—to offer a balance of safety and growth potential. The fixed-income component generally provides a stable income stream and downside protection, while the equity or commodity portion drives upside potential. This combination results in an efficient investment package that can suit a variety of market conditions and investor objectives. For instance, a capital-protected structured product can return a portion of the initial investment if the market falls, while still allowing participation in market gains.

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