Leveraged ceritifcates multiply the price movement of a particular instrument by a well-defined factor. Increases the price of the underlying asset, for example, by 10 points, then rises at a leverage of the lever 10 of the course certificate by 100 points. Leverage certificates are highly speculative, because as high as the odds are the risks of loss. The holder of a certificate does not provide additional collateral to cover the position in case it goes against the bet. Instead, there is a knock-out threshold, which, in case it is reached, automatically terminates trading and the investor loses all or most of invested funds. The advantage is that the size of the position and leverage can be adapted to suit each individual client.
There are more than 150,000 leveraged certificates on offer. As it is a leveraged product, we recommend it most of all to experienced investors who should always familiarize themselves with the terms of the trading and the risks it carries.
They represent a right to buy (call warrant) or sell (put warrant) an exactly specified amount of an underlying asset (stocks, share index, currency, commodity) for pre-arranged strike price and on a fixed date - maturity. Very attractive attribute of warrants is leverage, because of which you may invest much lower sum than with investing in underlying asset. Unlike standard options, warrants always represent a purchase, so that an eventual loss cannot go higher than the initial investment.
The seller (usually a big bank), on the other hand, opens itself to unlimited losses when issuing warrants. There are American warrants (can be executed anytime during maturity) and European warrants (can be executed only on the date of maturity).
Choose from more than 300,000 warrants issued by major institutions such as Deutsche Bank, UBS, Goldman Sachs, Citigroup, etc. By their nature, warrants are a risky product which can bring high profits, but also big losses.