Amazon.com, Inc. is a multinational e-commerce and cloud computing company based in Seattle, USA. With a market capitalization of currently almost USD 1 trillion, Amazon is one of the most valuable companies in the world. In recent years, the company further strengthened its position as leading e-commerce company while also expanding into new business segments as part of a rigorous diversification strategy. Today Amazon is also one of the largest music and video streaming providers as well as one of the market leaders in cloud computing.
The USD Amazon Twin Win certificate is an investment product without capital protection and is suitable for investors who have no clear market opinion of the Amazon share and, depending on the market environment, consider both rising and moderately falling prices (down to the barrier) to be possible in the medium term.
On the initial valuation date, the closing price of the Amazon share will be fixed as the starting value and the barrier (60% of the starting value) will be determined. During the observation period, the daily closing prices of the share are compared with the barrier. As long as the stock does not close 40% or more below its starting value on any day during the observation period, the payout will be effected at the end of the term according to the "Twin Win" mechanism:
- Any positive performance of the share up to the cap of +40% compared to the starting value is paid out at the end of the term 1:1 in addition to the nominal amount.
- A negative performance of the share down to the barrier will also be converted into profit at the end of the term 1:1 and paid in addition to the nominal amount, given that the barrier was never violated.
What happens if the barrier was violated?
If the barrier was touched or undercut at least once during the term and the closing price of the share on the final valuation date is below the cap of 140%, the redemption at maturity is effected in the form of physical delivery of Amazon shares.
If the stock rerises at least 40% above the starting value at maturity despite a previous barrier breach, the repayment will be effected at USD 7,000 per nominal value. This means, investors never participate in price increases of the share beyond the cap.
The certificate USD Amazon Twin Win quotes in USD. If the cash flows from the certificate are subsequently converted into another currency, additional risks as well as opportunities arise from possible exchange rate fluctuations.
Further information as well as the Key Information Document can be found on the product page.
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The Structured Products Team of Raiffeisen Centrobank