Tracker Certificate — Bear
Gains when the underlying falls, loses when it rises; worthless once the underlying reaches the reverse level.
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.
- Product
Redemption 100 %
Per 10'000 of nominal
| Underlying at maturity | Level | Redemption | Amount | Gain / loss |
|---|---|---|---|---|
| −30 % | 70 % | 130 % | 13'000 | +3'000 |
| unchanged | 100 % | 100 % | 10'000 | +0 |
| +30 % | 130 % | 70 % | 7'000 | −3'000 |
Coupons are shown as paid at maturity together with the nominal. Costs, taxes and the price you paid are not included.
Data table and formulas
Tracker Certificate - Bear (1300): redemption at maturity for an underlying at 0 % → 200 %; 100 % → 100 %; 200 % → 0 % of its initial level.
| Series | Formula | 0 % | 25 % | 50 % | 75 % | 100 % | 125 % | 150 % | 175 % | 200 % |
|---|---|---|---|---|---|---|---|---|---|---|
| Long Put - ITM | 1 × max(reverse level − S, 0) | 200 | 175 | 150 | 125 | 100 | 75 | 50 | 25 | 0 |
| Product | if S < reverse level: reverse level − S; otherwise 0 | 200 | 175 | 150 | 125 | 100 | 75 | 50 | 25 | 0 |
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 Put - ITM1 × max(reverse level − S, 0)
- Productif S < reverse level: reverse level − S; otherwise 0
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 Put - ITM (strike = Reverse Level)
- Equivalent: Zero Bond (face = Reverse Level) + Short Underlying, floored at zero
In plain English
The bear tracker is a long put with a strike at the reverse level, typically twice the initial level. Its value is reverse level minus underlying: at the initial level that equals 100, every point the underlying loses adds a point, every point it gains removes one.
If the underlying doubles the certificate is worth zero. Equivalently, the product is a zero bond with face value equal to the reverse level plus a short position in the underlying, floored at zero.
Chances and risks
Chances
- A simple way to be short without a margin account.
- Useful as a hedge for an existing long position.
Risks
- A rising market produces losses one for one.
- Total loss at the reverse level.
- Issuer credit risk.
Who it fits
- Investors hedging a long position, or expressing a clear negative view.
Who it does not fit
- Long-term holders; markets tend to rise over time.
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. - 1310Participation ProductsOutperformance Certificate
Moves one for one below the strike and faster than the underlying above it. - 1320Participation ProductsBonus Certificate
At least the bonus level at maturity if the barrier was never touched; a plain tracker if it was.Barrier - 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