If the underlying is below the strike (100%) the structure remains alive and the potential coupon escalates by a further 10% for the next auto-call date.If the underlying is above the strike (100%), accumulated coupons are paid at 10% per year of life and the whole structure is terminated and.70% downside knock-in put with continuous barrier which can knock-in any time.ДЄt each auto-call date there are two possibilities that determine if the product will be auto-called or will not pay a coupon but continue to the next period:.10% coupon escalating to 20% and 30% in years two and three if not auto-called and.

Three-year maturity with annual auto-call dates and 100% strike.This is referred to as soft protection because the product is usually capital protected unless this knock-in put is triggered.ДЇor illustrative purposes in this Learning Curve we assume the following: A sold knock-in put is often embedded to reduce the structure cost. If not auto-called, the coupon escalates, often to the next multiple for the next auto-call date andДў. A large coupon is payable if an automatic call level is triggered when the underlying is above the strike on an auto-call date.

While few auto-callables are exactly the same, most share common characteristics:ДЎ. These are usually from monthly to bi-annual intervals. is diluted because of greater activity from hedge funds, corporates, institutional investors and overwriting funds.ДЄn auto-callable product is a structured product that has an automatic call feature on pre-prescribed dates known as the auto-call dates. Recent activity in Asia, for example in Korea in January last year, suggests structured products play a pivotal role in volatility markets, although the theoretical effect in Europe and the U.S. Initially, they were issued on baskets of stocks, then on indices and now increasingly on single stocks. Auto-callables have been actively traded in Europe for several years and have now become an increasingly influential force in flow derivatives.

Autotrash callable only on entities