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Structured products (strukturierte Produkte)

Level 3 · Advanced
German termstrukturierte Produkte
Read firstRed flag catalog · Asset classes

A structured product combines a claim on an issuer with a derivative-based payoff linked to an underlying asset or reference value. Coupons, caps, barriers, buffers, and early redemption can reshape gains and losses, but they do not remove risk. The holder also bears issuer, liquidity, valuation, complexity, and embedded-cost risks.

The payoff reconstruction​

Before comparing returns, write what happens if the underlying:

  1. rises strongly;
  2. rises slightly or stays flat;
  3. falls above any barrier;
  4. crosses a barrier;
  5. becomes difficult to price or trade;
  6. performs well but the issuer defaults.

Then identify maximum gain, maximum loss, dividends forgone, call rights, maturity, secondary-market terms, and all disclosed costs. EU PRIIPs rules require a Key Information Document to support comparison of product features and risks [1].

Worked example​

A certificate linked to an index pays at most 8% after one year. If the index falls no more than 20%, principal is repaid; below the barrier, losses follow the index. The issuer can still default.

The label “protected” is incomplete. Upside is capped, downside changes discontinuously at the barrier, and repayment depends on issuer solvency. A direct payoff table is more informative than the product name.

This wiki-pointer card provides the decision frame; product-specific legal documents control the actual mechanics.

Check yourself​

A €10,000 certificate caps its one-year gain at 8%. What is the maximum value before costs if the issuer pays?

The underlying index rises, but the certificate issuer defaults. Which risk matters?

Which scenarios belong in a payoff reconstruction? Select all that apply.

A barrier certificate is marketed as conditionally protected. Why is that label incomplete?

Sources​

  1. EUR-Lex — PRIIPs Regulation (EU) No 1286/2014, https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A02014R1286-20240109 (consolidated 2024)
  2. ESMA — Structured Retail Products: the EU market, https://www.esma.europa.eu/sites/default/files/trv_2018_2-structured_retail_products_the_eu_market.pdf (2018)
  3. BaFin — Investment certificates: market survey results, https://www.bafin.de/SharedDocs/Veroeffentlichungen/EN/Fachartikel/2025/meldung_25_05_21_Anlage_Zertifikate_en.html (2025)