Leverage – The Julius Baer warrants

Leverage products are options that are securitized and offer great potential even though you put little at stake. Among the most well known leverage products are call warrants and put warrants.

Leverage products – how they work

Warrants certify the right to buy (call warrant) or sell (put warrant) an underlying security at a predetermined price on a certain date. Warrants allow you to play upon short-term price fluctuations in an underlying security with a modest investment. Because of the leveraging effect, the chances for profits as well as losses are substantially higher compared to a similarly sized investment in the underlying security.

Leverage products are the right investment solution if you

• are prepared to take on a higher level of risk
• want to participate disproportionately in or hedge yourself against price fluctuations in an underlying security
• expect the underlying security to perform positively (call) or negatively (put) 
  

Call-Warrant If the price of the underlying security upon expiration is above the break-even (the strike price plus the purchase price), you realize a profit, otherwise a loss.

Put-Warrant If the price of the underlying security upon expiration is below the break-even (the strike price minus the purchase price), you realize a profit, otherwise a loss.