Reverse Convertible with Conditional Coupon is a financial instrument that provides investors with the access to the securities, allowing them to protect their investments. This type of structured product uses a combination of options and other instruments to give investors the opportunity to make a profit under certain conditions, without having to have direct access to the asset. This type of structured product refers to yield enhancement structured products, which is designed to increase income through the use of complex algorithms and derivatives. These structured products offer higher returns than traditional fixed income securities, but they also come with higher potential risks.
Until the beginning of 2021, this type of structured products was called Express Certificate Without Barrier, this renaming made it possible to differentiate structural products more accurately for increasing profitability.
The main characteristics of this structural product are as follows:
When investing, market participants usually expect the following trends: