Privatam is proposing us a serie of posts on structured products. Find below their third post : The issuer of a structured product will take the opposite bet from the investor. It wants the investor to lose money, so it makes money.
Myth & Reality about Structured Products
Reality: A resounding no.
+ When a bank issues a product, it will look to be as fully hedged as possible from market movements that will affect the performance of the product.
+ In other words, it will look to generate neither a profit nor a loss if Apple goes up or down.
+ The way the issuers make money is by charging a fee when the product is issued. That’s the business model, plain and simple.
+ Additionally, even if this would not be the case, there is specific regulation in place which prevents issuers to make directional bets.
investor
What’s more, issuers and distributors are very much interested in the success of the notes sold. This means happy clients and repeat business.
Myth & Reality about Structured Products
You can find the previous Myths and Realities posts on below links :
Structured products present an asymmetry of risk/return against investors
Myth & Reality about Structured Products
Source: Arthur bauch – co-founder Privatam
Privatam is proposing us a serie of posts on structured products. Find below their third post : The issuer of a structured product will take the opposite bet from the investor. It wants the investor to lose money, so it makes money.
Privatam is proposing us a serie of posts on structured products. Find below their third post : The issuer of a structured product will take the opposite bet from the investor. It wants the investor to lose money, so it makes money. Privatam is proposing us a serie of posts on structured products. Find below their third post : The issuer of a structured product will take the opposite bet from the investor. It wants the investor to lose money, so it makes money.