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Turbos

What are turbos?

With a turbo investors can realise their personal market opinion with little money invested. The redemption amount of a turbo depends on the performance of the underlying. At the beginning of the term, the strike price and the barrier are set. For products without a defined term ("open end"), the strike price and barrier are adjusted on a regular basis.

A turbo long profits from rising prices of the underlying. Here, the barrier is set below the current price of the underlying. A turbo short benefits from falling prices of the underlying. Here, the barrier is set above the current price of the underlying. Even the smallest fluctuation in the price of the underlying asset can lead to higher profits due to the leverage effect than when investing directly in the underlying asset. The unlimited earning potential, however, is offset by the risk of total loss of invested capital if the specified price barrier is breached.

How do turbos work?

A turbo offers the investor the opportunity to benefit from price movements of an underlying with leverage effect. The leverage effect results from the lower purchase price of a turbo compared to a direct investment in the underyling asset. The lower the purchase price of a turbo, the greater the leverage. This can be easily calculated: Leverage = (base price / price of turbo) * ratio.

If the price of the underlying rises, the price of the turbo long increases disproportionately in line with the selected leverage. The intrinsic value of a turbo long is calculated as the difference between the stock price and the strike price. If the price of the underlying falls, the price of the turbo short increases disproportionately according to the selected leverage. The intrinsic value of the turbo short is calculated as the difference between the strike price and the share price. A turbo has the disadvantage that it expires worthless upon reaching a predefined barrier or the investor only receives a possible residual value.


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The tutorial gives you information about the functionality, the chances and risks of the product.

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