The certificates in comparison
Investors ask themselves what advantages and disadvantages the respective products have to offer and when they should use which certificate. With investment products, you as an investor can significantly expand trading opportunities. You can protect your portfolio against losses with little effort. By using deep discount or guarantee certificates, you can create a viable substitute for fixed-term deposits. For old-age provision, on the other hand, certificates are generally unsuitable. Under no circumstances should you risk that in the event of a bank failure, your pension provision will be lost in the issuer’s bankruptcy estate.
With leverage certificates, you as an investor with a small capital investment have the chance of a disproportionate profit. In addition, the lower costs give you different options for diversifying your investments. Leverage certificates also enable you to earn money on the financial markets even when prices are falling. You can part with your product at any time on the basis of current prices. The order is executed quickly. You can choose between leveraged products with and without knock-out.
Tip: Even in the worst case, if the leverage certificate reaches a possible knock-out threshold and trading in the product is stopped, don’t lose more than your stake. There is no obligation to make additional payments, as agreed, for example, in futures trading.
Essentially, the difference between investment and leverage products lies in the leverage. While investment products rely more on security, you take a greater risk with the leverage, but as an opportunity-oriented investor you also have the opportunity to achieve much higher profits.