Memory Express Certificates are mainly used by investors who want to achieve the highest possible returns with the lowest possible risk with the help of the stock market. These certificates enable positive returns not only when prices are stagnating or rising, but also when the prices of the underlying stocks decline significantly.
Landesbank Baden-Württemberg is currently offering Memory Express certificates plus for the DAX values SAP (ISIN: DE0007164600) and Siemens (ISIN: DE0007236101) for subscription. Both certificates have a 25 percent security buffer. While the certificate on Siemens shares (ISIN: DE000LB2KNY1) offers a potential return of 3.50 percent per observation period, investors with the SAP certificate (ISIN: DE000LB2KNW5) can even achieve a gross return of EUR 4.00 per observation period. The functionality of these certificates should be illustrated using the example of the Memory Express certificate plus on the SAP share.
4.00% interest, 25% protection
The SAP closing price of December 8th, 2020 is set as the starting value for the certificate. The barrier will be at 75 percent of the starting value. The prospective interest payment for each observation period (the first lasts a little more than 14 months) is 4.00 percent. If the share is quoted at or above the starting value on one of the valuation days set annually from the second observation period onwards, the certificate including the interest payment will be repaid early. From the second observation period, the early repayment levels decrease by 5 percent. If the share price is between the barrier and the starting value, only the coupon is paid out. If the share falls below the barrier on one of the key dates, the interest payment is canceled. This will be paid back if the share price is above the barrier again on one of the following valuation days.
If the SAP share is at least 25 percent in the red compared to the starting value on the last valuation day (February 19, 27), the certificate will be redeemed by delivery of SAP shares, whereby the number of shares to be delivered is in the interests of the investors derived from the 75 percent barrier. With a starting price of 101 euros, investors receive ((1,000: (101×0.75)) = 13,20132 SAP shares, with the equivalent of the fractional portion being paid out.
The Memory Express plus certificates, with a maximum term of 02/26/27, can still be subscribed to at 101 percent until 12/8/20.
CertificateReport Conclusion: These certificates offer investors bonus payments of 3.50 and 4.00 percent for each observation period in a maximum of 6 years and 2.5 months – provided they are not repaid early – if the share price falls by up to 25 percent.
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