INVESTMENT CERTIFICATES RESEARCH

Investment certificates research supplements the assessments of shares, indices and commodities generated in the fundamental analysis with option components with the goal of modifying the investment’s pay-out profile compared to direct investment. This is done in light of the realisation that the symmetrical opportunity/risk profile resulting from direct investment is often at odds with the risk profile sought after by the private investor. This discrepancy is minimised by making use of the opportunities offered by the option market, which would otherwise not be accessible to most private investors.

The prime goal of investment certificates research is to recommend investment certificates that are more likely to generate a positive return than would be the case with the direct investment (“loss avoidance”, “sideways yield”). Sacrificing the chance of very high gains or accepting a below-average performance with steeply rising underlyings is often deliberately accepted here. The recommended structures usually have a more defensive character than the direct investment.

The investment certificate recommendation is based on the assessment of a fundamental analysis of the underlying instrument and on a careful analysis of the market for options on the selected underlying instrument. Historical and implicit volatilities and vola skews are examined within the framework of the option price analysis. Forward curves are also taken into account for certain underlyings.