Relevant terms
2022-05-23
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Issuer: Private or investment banks that issue notes
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Underlying assets: The return on note investment is affected by the performance of linked equities that can be listed locally or overseas and can be a single equity or a basket of equities
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Trade date: The day when an order of a note is placed
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Issue date: The day when notes are issued, generally 7 or 14 days after the trading day (T+7/T+14)
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Initial price: The closing price on the day when an order of an equity or asset is placed
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Notational value: The total value of a note
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Strike/Exercise price: The pre-agreed price of a relevant asset to be purchased or sold
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Knock-out price: When the asset price exceeds the knockout price, the issuer can redeem the note before the maturity date and return the principal or the principal + interest
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Observation frequency: The frequency of observing whether a note can be knocked out, mostly continuous, daily, or monthly
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Coupon rate: The interest rate at which a note is issued. Mostly coupons are distributed monthly. The coupon rate is annualized
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Tenor: The effective period of a note
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Final valuation date: The final valuation of the equity will be settled in accordance with the closing price of the current day
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Maturity date: A customer will obtain the corresponding return on investment on the date in accordance with equity performance or purchase relevant assets at the exercise price
