The underlying is the reference value on which a leverage product/certificate is based and whose performance also significantly determines the performance of the leverage product/certificate. This can be a share, a share index, an exchange rate or even a commodity. In principle, all capital market products can be used as the underlying.
The issuer is the legal entity which creates (registers) and sells a security. BNP Paribas Issuance B.V. acts as issuer for the products listed on this website.
The financing costs of Mini-Future Certificates and Knock-Out Warrants are made up of the current Market Rate and an interest rate margin (Financing Spread). The Market Rate level is determined by the currency in which the underlying is quoted (e.g. CHF for the SMI®, USD for the Nasdaq). The relevant Market Rate is derived from the overnight or one-month rate. With Mini-Longs and Knock-Out Warrant Calls, BNP Paribas adds an interest rate margin to the relevant Market Rate, and with Mini-Shorts and Knock-Out Warrant Puts respectively, BNP Paribas deducts an interest rate margin from the relevant Market Rate. The interest rate margin is usually identical for Mini-Longs/Knock-Out Calls and Mini-Shorts/Knock-Out Puts. The costs associated with the leveraged exposure are charged to the investor’s invested capital on an ongoing basis. BNP Paribas can also charge the financing costs during the trading day, which means that day traders (who buy and sell their position within one trading day) may incur financing costs too.
The part of the underlying (e.g. index, equity, commodity, ...) of a Mini-Future Certificate financed by BNP Paribas. At any time, the Financing Level plus the capital outlay equals the price of the underlying, taking into consideration the Ratio, and if applicable the Conversion Rate and the bid/ask spread. The Financing Level does not remain constant throughout the life of the Mini-Future Certificate but is instead adjusted on a daily basis.
The risk that the price of an underlying changes from one level to another without any trading in between. A gap is the difference between the closing price of a trading session and the opening price of the next trading session, often due to news or events occurring while markets are closed. Gaps usually occur during trading interruptions, for example after the weekend or overnight.
The Leverage shows by how much a Mini-Future Certificate or a Knock-Out Warrant amplifies the movements in the price of the underlying. The lower the investor‘s capital outlay in proportion to the Financing Level (Strike), the greater the Leverage.
The part of the underlying (e.g. index, single stock, commodity, ...) financed by the investor. At any time, the capital outlay represents the price of a Mini-Future Certificate or a Knock-Out Warrant respectively, taking into consideration the Ratio, the bid/ask spread and the Conversion Ratio (in case the Mini-Future Certificate is traded in a different currency than the underlying).
The Ratio defines the number of Mini-Future Certificates or Knock-Out Warrants needed to control one underlying. For a Mini-Future Certificate/Knock-Out Warrant on a share with a Ratio of 50 this means an investor would need to buy 50 units of this Mini-Future Certificate/Knock-Out Warrant in order to control one underlying share. The Ratio is an important parameter when calculating the number of Mini-Future Certificates/Knock-Out Warrants needed to hedge a certain exposure.
When a Stop-Loss Event in a Mini-Future Certificate occurs, trading on the stock exchange is discontinued and BNP Paribas unwinds the position and calculates the residual value to be repaid. The residual value is usually repaid to the investor within five bank working days.
The actual amount of the residual value depends on the current market conditions at the time of the Stop-Loss Event. In the worst case, the residual value could also be zero.
Since certificates on commodities are usually based on futures contracts, the rollover takes place shortly before the expiration of the underlying futures. The current underlying futures contract is sold and the next expiring futures contract is bought. The current underlying contract is published on the product detail pages.
The Stop-Loss Level of Mini-Future Certificates is intended to prevent investors from suffering a total loss.
On the first trading day of each month, BNP Paribas fixes the Stop-Loss Levels for Mini-Future Certificates on indices and equities on the basis of the Stop-Loss Buffer and the Financing Level then valid at the time. Large dividend payments may result in a sub-monthly adjustment.
With Mini-Future Certificates on commodities, the adjustment is dependent upon the configuration of the respective futures contract.
The Stop-Loss Buffer defines the Stop-Loss Level relative to the Financing Level. The Stop-Loss Buffer is identical for Mini-Longs and Mini-Shorts on the same underlying and can be adjusted by BNP Paribas if necessary.
As soon as the underlying reaches the Stop-Loss Level in the course of trading, or falls below (for Mini-Longs) or exceeds (for Mini-Shorts) it, the Mini-Future Certificate expires and trading on the exchange is discontinued. The underlying position is unwound by BNP Paribas.
The Financing Spread of Mini-Future Certificates and Knock-Out Warrants is an interest rate margin set by BNP Paribas.