Checklist approaching primary market of Structured Products

Investing in structured products can offer a unique combination of stability, yield, and flexibility, making them an attractive option for many investors.

However, approaching the primary market of structured products requires careful consideration and preparation. To ensure that you make an informed investment decision, it is crucial to have a checklist in place that will guide you through the process. This checklist should cover all the important factors that need to be considered before investing in structured products, such as the repayment profile, market conditions, underlying assets, and potential risks and rewards. By following a comprehensive checklist, you can increase your chances of success in the primary market of structured products and achieve your investment goals.

What market expectations do you have, both generally and with regard to individual underlying securities?

Before investing in structured products, it is crucial to understand the overall market expectations and how they will impact the performance of individual underlying securities. This includes understanding the current economic conditions, market trends, and factors that could affect the value of the underlying assets.

Do you know the underlying security? Have you been following its recent performance?

It is essential to have a good understanding of the underlying security that the structured product is linked to. This includes being aware of its recent performance, any major events or developments that could impact its value, and its potential for growth or decline in the future.

Do you know how the underlying security will need to perform for the product to generate a profit?

Before investing in structured products, it is important to understand how the underlying security will need to perform for the product to generate a profit. This includes understanding the terms of the product, such as its expiration date, and the conditions that must be met for it to be profitable.

Are you familiar with the market scenarios that can result in a loss?

Investors should be aware of the various market scenarios that could result in a loss when investing in structured products. This includes understanding the conditions under which the product might expire worthless, as well as the potential risks associated with the underlying security.

Do you know the issuer of the product and have you been informed of the issuer risk?

It is crucial to be aware of the issuer of the structured product and to understand the issuer risk. This includes understanding the issuer’s financial strength and stability, as well as any past issues or concerns that could impact the value of the product.

Does the product correspond to your risk appetite?

Investors should consider their own risk tolerance and financial goals when deciding whether to invest in structured products. This includes determining whether the product corresponds to their risk appetite and whether it is aligned with their investment objectives.

Have you taken note of all sources of information relating to the product?

Before investing in structured products, investors should take note of all relevant sources of information, including the prospectus, marketing materials, and any other publicly available information. This helps to ensure a comprehensive understanding of the product and its associated risks.