



Investors are subject to the risks of stock price fluctuations, the effects of dividends and corporate actions. When the note expires, they may receive the underlying stock or receive the cash amount that is less than the original investment amount. It may lose some or all of the principal, resulting in loss of partial.
Equity-linked note is not listed or traded on any market managed by the Hong Kong Exchanges and Clearing Limited or any other stock exchanges. Although some issuers offer secondary market trading, investors may need to bear the loss on the spread if selling before the maturity date.
Investors would bear the credit risk of the issuer or the guarantor. If the issuer or the guarantor is bankrupted or closed down, the investment principal may be suffered, and it may lose part of or all of the principal.
There are many types and forms of structured products. Investors should beware of the following investment risks, including but not limited to:
Credit risk: The credit risk of the issuer or guarantor of a structured product. When the issuer or guarantor goes bankrupt or fails, even if it is a principal-protected product, the investment principal will still cause loss
Liquidity risk: Structured products generally do not provide a secondary market. Due to the lack of a secondary market, investors might able to unwind transactions at the bid price that is determined by the issuer and the transparency is low.
Credit risk: The credit risk of the issuer or guarantor of a structured product. When the issuer or guarantor goes bankrupt or fails, even if it is a principal-protected product, the investment principal will still cause loss
Liquidity risk: Structured products generally do not provide a secondary market. Due to the lack of a secondary market, investors might able to unwind transactions at the bid price that is determined by the issuer and the transparency is low.
Credit-linked product = bonds + credit derivatives
Credit-linked note is a contract that transfers or avoids credit risk. The issuer pays additional premium to the investor of the note to transfer credit risk. When the credit rating of the relevant asset changes, the investor will be responsible for the losses related to the change of credit, when a credit default event occurs, investors may have to bear some or all of the principal losses.
There are many types and forms of structured products. Investors should beware of the following investment risks, including but not limited to:
- Credit risk: The credit risk of the issuer or guarantor of a structured product. When the issuer or guarantor goes bankrupt or fails, even if it is a principal-protected product, the investment principal will still cause losses;
- Liquidity risk: Structured products generally do not provide a secondary market. Due to the lack of a secondary market, investors cannot sell contracts before maturity. Therefore, investors can only enter into liquidation / unwinding transactions with the issuer, the price is determined by the issuer, and the transparency is low.
Generally, it is suitable for customers who are seeking for capital protected investment.
This product is with a principal protected feature, but the principal protected feature depend on the issuer’s creditworthiness.
This investment product is designed to be held until maturity. If you try to early terminate your investment, you may receive an amount which is substantially less than your initial investment amount.
Investors would bear the credit risk of the issuer or the guarantor. If the issuer or the guarantor is bankrupted or closed down, the investment principal may be suffered, and it may lose part of or all of the principal.
Credit risk: The credit risk of the issuer or guarantor of a structured product. When the issuer or guarantor goes bankrupt or fails, even if it is a principal-protected product, the investment principal will still cause loss
Liquidity risk: Structured products generally do not provide a secondary market. Due to the lack of a secondary market, investors might able to unwind transactions at the bid price that is determined by the issuer and the transparency is low.
As for the options structure, for example Accumulator, is equivalent to buying call options and selling put options at the same time and all of those options are with KO feature.
- Admission fee is high. Although the minimum investment amount depends on different counterparties, the requirement would be HK $ 2,000,000 or more normally;
- If investors would like to early terminate the contract before expiration, they might have to pay unwind cost that is much higher than expected;
- When the price of the underlying stock rises (falls ^), the contract held by investor may trigger the "Knock-out" event. Once triggered the "Knock-out" event, the relevant contract will be terminated immediately, and investor is no longer able to continue buying (selling ^) the stock at the specified price;
- When the price of the underlying stock falls (increases ^), the investor buys (sells ^) the stock at the specified price, and the customer is obliged, may suffer loss as a result.
- Specific terms can also be added to the cumulative option contract: if the price of the relevant asset falls (rises ^) through the strike price, the client must accept to buy (sell ^) two or three times the number of shares at the specified price.
- If the counterparty breaches its obligations or becomes insolvent, might not be able to buy (sell) the shares at the specified price, and therefore, investors may lose the entire investment amount.
- ^Is a Decumulator