Guarantee certificate also capital protection certificate (guarantee certificate, floor certificate)

A securitized claim – fixed in term – usually three to five years, – based on one or more underlying assets or whose value is formed from several indicators. – However, the holder of the certificate is usually guaranteed an eighty percent repayment of the capital invested (guarantee level, participation factor) on the part of the issuer. – If the value of the certificate at maturity is higher than the value of the reference base, the investor receives a contractually predefined sum, which is based on the price of the underlying instrument on the expiration date. In detail, there are many special designs of the guarantee certificates. – Above all, the guarantee level can be smaller or larger than the usual eighty percent. If the investor wishes a higher participation factor, the issuer usually restricts the profit possibility by a cap (capped guarantee certificate). – Another variant preferred by many investors is the average guarantee certificate. Here, the redemption is not dependent on the price level on the maturity date. Instead, the calculation is based on an average of the price levels on certain days. For the holder of the certificate, this reduces the risk that a very sharp loss in the underlying asset at maturity suddenly destroys the profit opportunities. – See airbag certificate, basket certificate, bonus certificate, discount certificate, express certificate, guarantee product, leverage certificate, outperformance certificate, participation certificate, quanto, rainbow option, safety lock, sprint certificate, strategy certificate, theme certificate, twin-win certificate. – Cf. BaFin Annual Report 2009, p. 163 f. (BaFin special audits relating to guarantee certificates issued by Bank Lehman).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/