* Trading with financial instruments related to the significant risks. The value of the investments can both increase and decrease and the investors may lose all their investment capital.
Investment products are not available and information in respect to them may not be distributed to persons resident in any territory where such distribution would be contrary to local law.
** Capital protection is realized through defensive part of the portfolio composed of securities with predefined rate of return. Invested capital still remains subject to credit risk - default of the issuer. The share of defensive part in the portfolio depends on the selected level of protection. For more detailed description please refer to the following examples.
Example #1. IIP with capital protection of 100%
Total investment amount = $10 000
Nominal value of defensive asset = $10
Product lifetime = 4 months
Discount value = $10 * 0.015 * 4 / 12 = $0.04
Asset value with discount = $10 – $0.04 = $9.96
Quantity of defensive asset = $10 000 / $10 = 1 000
Investment part of portfolio = $0.04 * 1 000 = $40
Composition of portfolio:
- 1 000 units of defensive asset are bought with discount at $9.96 (total amount = $9 960).
- Remaining $40 are used to form option construction.
- Defensive asset is sold at maturity at $10 000. Initial investment amount is protected.
- Option construction either expires worthless or with profit.
Example #2. IIP with capital protection of 85%
Total investment amount = $10 000
Nominal value of defensive asset = $10
Product lifetime = 4 months
Discount value = $10 * 0.015 * 4 / 12 = $0.04
Asset value with discount = $10 – $0.04 = $9.96
Defensive part of portfolio = 0.85 * $10 000 = $8 500
Quantity of defensive asset = $8 500 / $10 = 850
Investment part of portfolio = $0.04 * 850 + $1 500 = $1 534
Composition of portfolio:
- 850 units of defensive asset are bought with discount at $9.96 (total amount = $8 466).
- Remaining $1 534 are used to form option construction.
- Defensive asset is sold at maturity at $8 500. 85% of initial investment amount is protected.
- Option construction either expires worthless or with profit.
