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Turbos/Turbos Pro

Turbos may have early termination in relation to the expiry date established in the issue conditions. The early termination possibility is determined by a barrier level. When the underlying asset price reaches or exceeds the barrier level, the Turbo is terminated early (knocked-out).

In the case of Turbo Call, early termination is produced if the Underlying Asset level is “less than or equal to” the barrier established in the issue conditions.

In the case of Turbo Put, early termination is produced if the Underlying Asset level is “more than or equal to” the barrier established in the issue conditions.

When the aforementioned conditions are met, Turbos terminate early without any value and are delisted.

Taking the aforementioned into account, Turbos are characterized by high leverage that is reflected in the premium level (or Turbo price). Similarly, its price evolution is mainly determined by the underlying asset price evolution and not so much by its volatility or expiry term.

Within this same product category, we also find the so-called ‘Turbo Pro’. These incorporate two thresholds (knock-in barriers) that form an activation price range. Therefore, Turbo Pros will remain inactive in the market until the level of the underlying asset trades within the mentioned range. Once activated, Turbo Pros act as any other Turbo.

 

 

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