Bonus cap – in case DAX & Co. take a break!

After the 50% rally of the DAX® since the end of March, the DAX® is clearly running out of steam. A similar picture emerges with the German small cap indices MDAX® and SDAX® and with the EuroStoxx®50. The most important economic data and a large part of the company’s figures for the past quarter have already been published. With that the impulses disappear. One or the other investor now even expects consolidation, but does not dare to speculate against the central banks. In addition, governments promise billion-dollar economic stimulus and aid programs – both arguments that speak against a drastic drop in prices. Investors for whom direct entry is currently too risky have interesting return opportunities with bonus cap certificates. Here you will find eight Bonus Cap certificates with a distance of more than 25 percent to the barrier and a term until the end of the year.

HVB Bonus-Cap certificates are equipped with a barrier and a cap level. If the barrier is neither touched nor fallen below during the entire term, holders of the security receive the cap amount – adjusted by the subscription ratio. However, if the barrier is touched once, the investor loses the chance of a bonus. According to the German Derivatives Association, these securities are among the most popular products. They are suitable for investors who expect the underlying stock to move sideways or moderately and cannot rule out smaller setbacks. When choosing securities, it is important not only to look at the achievable bonus return, but also to choose a generous distance from the barrier. The securities selected here are at least 25 percent from the barrier. However, the built-in cap limits the chance of winning.

Take MTU Aero Engines, for example: the bonus cap certificate on MTU Aero Engines shares is currently quoted at EUR 145.28 and the share at EUR 145.75. The barrier was set at EUR 100.00 when the security was issued. This currently results in a distance of 31.4 percent from the barrier. If the MTU Aero Engines share is listed above EUR 100.00 by the final valuation date on December 18, 2020, investors will receive EUR 160.00 per security at the end of the term. It does not matter whether the share is quoted at EUR 110.00, EUR 150 or EUR 180 on the valuation day. In each of these cases there is EUR 160.00. If, on the other hand, the barrier was touched or fallen below during the term, the holder of the security receives the determined closing price of the share at the end of the term – however, the maximum cap amount of EUR 160.00.

Investment opportunities

Bonus cap certificates for speculation on a sideways development of the respective share

UnderlyingWKNSales price in eurosbarrier
Cap (upper price limit)
Distance to the barrier in%
Final valuation dayYou can find more bonus cap certificates on the share …
Aixtron SEHZ3QZ210.877.50 EUREUR 12.0027.628.12.2020here
BMW AGHZ9QB170.7742.00 EUREUR 80.0025.028.12.2020here
Commerzbank AGHZ9QBV4.57EUR 2.605.00 EUR40.728.12.2020here
Delivery Hero SEHZ3HS999.2664 EUR110.00 EUR34.4December 18, 2020here
MTU Aero Engines AGHZ9QJ1145.28100.00 EUR160.00 EUR31.4December 18, 2020here
TeamViewer AGHZ3R9H57.2832.00 EUR64.00 EUR30.328.12.2020here
Tesla Inc.HR052M1,192.17$ 920.00$ 1,350.0038.828.12.2020here
Varta AGHZ3RAF99.1268.00 EUR135.00 EUR27.828.12.2020here
Source: HypoVereinsbank onemarkets; As of July 31, 2020; 10:09 a.m.

You can find information on how bonus cap certificates and numerous other products work here at onemarkets knowledge.

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Please note the important information and the disclaimer.

This information does not constitute investment advice, but an advertisement. The public offer is made exclusively on the basis of a securities prospectus that has been approved by the Federal Financial Supervisory Authority (“BaFin”). The approval of the prospectus is not to be understood as a recommendation to purchase these UniCredit Bank AG securities. The prospectus including any supplements are decisive and the Final Terms. It is recommended that you read these documents carefully before making any investment decision in order to fully understand the potential risks and opportunities when deciding to invest. You are about to purchase a product that is not easy and can be difficult to understand.

How the HVB products work

The bonus cap contribution – in the event that DAX & Co. take a break! first appeared on onemarket’s blog (HypoVereinsbank – UniCredit Bank AG).

Author: Richard Pfadenhauer


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