Glossary

Geared Reverse Convertible

This type usually falls in the category of structured products with yield enhancement, a modification of Reverse Convertible.
It differs from the others by the fact that if the underlying asset price falls below the original one, the investor will lose more money than he has invested. For example, if Gearing is 1.5, the price fall by 10% means the loss of 15% for the investor. In this respect this type resembles the category of structured products with leverage.
Share: