Bonus Certificate
At least the bonus level at maturity if the barrier was never touched; a plain tracker if it was.
Payoff at maturity
Move the parameters; the product formula and its building blocks are recomputed from the same engine that is tested against the workbook.
Barrier products are path dependent. The chart shows the redemption at maturity given the scenario you select; whether the barrier was touched is decided by the whole price path, not by the final level alone.
- Barrier never touched
Redemption 110 %
Per 10'000 of nominal
| Underlying at maturity | Level | Redemption | Amount | Gain / loss |
|---|---|---|---|---|
| −30 % | 70 % | 70 % | 7'000 | −3'000 |
| unchanged | 100 % | 110 % | 11'000 | +1'000 |
| +30 % | 130 % | 130 % | 13'000 | +3'000 |
Coupons are shown as paid at maturity together with the nominal. Costs, taxes and the price you paid are not included. Scenario: Barrier never touched.
Data table and formulas
Bonus Certificate (1320), scenario "Barrier never touched": redemption at maturity for an underlying at 0 % → 0 %; 70 % → 70 %; 100 % → 110 %; 110 % → 110 %; 200 % → 200 % of its initial level.
| Series | Formula | 0 % | 25 % | 50 % | 75 % | 100 % | 125 % | 150 % | 175 % | 200 % |
|---|---|---|---|---|---|---|---|---|---|---|
| Long Underlying | S | 0 | 25 | 50 | 75 | 100 | 125 | 150 | 175 | 200 |
| Long Down and Out Put | if S ≤ barrier: 0; otherwise 1 × max(bonus level − S, 0) | 0 | 0 | 0 | 35 | 10 | 0 | 0 | 0 | 0 |
| Product | if S ≤ barrier: S; otherwise max(S, bonus level) | 0 | 25 | 50 | 110 | 110 | 125 | 150 | 175 | 200 |
Largest difference between the sum of the blocks and the product formula over the grid: 0.0e+0.
How it is built
Each block drawn on its own, then added. The last chart is the sum, and it is identical to the product line above.
- Long UnderlyingS
- Long Down and Out Putif S ≤ barrier: 0; otherwise 1 × max(bonus level − S, 0)
- Product: barrier never touchedif S ≤ barrier: S; otherwise max(S, bonus level)
Largest gap between the sum of the blocks and the product formula on this grid: 0.0e+0. The same identity is tested for every product and scenario in the site's test suite.
Construction, as listed in the workbook
- Long Underlying (Zero-Strike Call)
- Long Down and Out Put (strike = Bonus Level)
In plain English
A tracker plus a down-and-out put struck at the bonus level. While the barrier holds, the put tops up any redemption below the bonus level to exactly the bonus level. Above the bonus level the tracker takes over and the upside is unlimited.
Touching the barrier knocks the put out. From then on the product is a tracker: it ends wherever the underlying ends, bonus gone.
Chances and risks
Chances
- A minimum redemption above the initial level in a flat or slightly falling market.
- Unlimited upside.
- No cap in the standard version.
Risks
- After a barrier touch, full downside and no bonus.
- No dividends.
- Issuer credit risk.
Who it fits
- Investors who expect sideways to rising markets and want a buffer against moderate declines.
Who it does not fit
- Investors who expect a sharp fall during the term.
Features that can be added
Cross-category features from the workbook that issuers attach to this type.
Nearby on the map
- 1300Participation ProductsTracker Certificate — Bull
One for one with the underlying, often an index or a basket that is hard to buy directly. - 1300Participation ProductsTracker Certificate — Bear
Gains when the underlying falls, loses when it rises; worthless once the underlying reaches the reverse level. - 1310Participation ProductsOutperformance Certificate
Moves one for one below the strike and faster than the underlying above it. - 1330Participation ProductsBonus Outperformance Certificate
A bonus certificate with extra participation above the strike.Barrier - 1340Participation ProductsTwin-Win Certificate
Gains from a rise and from a moderate fall; a plain tracker once the barrier is touched.Barrier