StructuraWisor by Finwisor · AMFI-Registered Distributor (ARN-166452) · Educational platform, not a solicitation to invest
Three dials shape most structures. Understand how participation, caps and barriers interact and you can read almost any payoff.
Participation is the share of the underlying's move you receive. A participation of 100 percent passes the full rise through; 60 percent passes through a little over half; 150 percent gears it up.
Higher participation has to be paid for somewhere, usually with a cap or a shorter protection period.
A cap is the maximum return the structure will pay. It funds other features by handing back the strongest part of the upside. The higher the participation, the more a cap tends to bite.
A barrier is the level at which a protective feature switches on or off. Above it you might keep a coupon or a floor; below it you can be fully exposed to losses.
These three dials trade against each other. Improve one and you usually pay for it in another.
Improve one dial and you usually pay for it in another.
This article is educational and does not constitute investment, tax or legal advice, nor a solicitation to invest. Any figures are indicative illustrations of mechanics, not forecasts. Refer to official term sheets and consult a qualified professional before investing.