Sunday, March 14, 2010

Accumulator (Structured product)

Accumulator is financial derivative product. Last financial crisis, Hong Kong folks dubbed this pain investment as "I kill you later". How does it work...

Basic idea is an issuer (banker/broker) sells accumulator contract to buyer (investor) for a underlaying stock at a predetermined fixed price (strike price), settled periodically. this allows the investor "accumulate" the underlaying stock over the term period of contract.

Example:
An investor agreed to "accumulate" 100 shares a month at fixed price of $80/share for one year contract. Below diagram illustrated for scenarios of underlaying stock go up and down.

Bear in mind, all investment products have its risk.


11 comments:

  1. 一個人想法的大小,決定他成就的大小。......................................................

    ReplyDelete
  2. 量力而為,別勉強了,Cut your coat according to your cloth..............................................

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  3. 好的部落格,希望您能繼續堅持!!! ........................................

    ReplyDelete
  4. 仇恨是一把雙刃劍,傷了別人,也傷了自己......................................................

    ReplyDelete