A security that allows you to play the rise or fall of an index
Certificates are derivative products issued by financial institutions and give their buyer exposure to the rise or fall of a certain underlying asset, generally a stock market index, but also to a single stock or a basket of stocks.
Tradable under the same conditions as shares, certificates are issued for a given period and are redeemed at maturity under conditions determined in advance. They are therefore securities, financial contracts between an issuer and a holder which allow the latter to make a profit or loss depending on the evolution of the associated index.
The different types of certificates
Bulls reproduce the variations of the underlying and are designed to play the rise of the underlying. Some certificates have a multiplier effect on the upside, but are therefore more risky because this multiplier effect is also present on the downside.
Bears that reproduce the opposite movements of the underlying. They are designed to play the underlying's downside. Similarly, some bears have a downward multiplier effect, but are riskier because this multiplier effect is also present on the upside of the underlying.
Discounts allow you to buy the index cheaper, or sell the index more expensive, but in the case of a given price stability. Thus, in the absence of volatility, these certificates bet on the stability of the underlying asset.
Turbos are certificates with an amplifying effect and are intended for the most risk-averse investors. However, amplification means the risk of a significant gain with leverage in the event of a positive trend and the risk of a significant loss in the opposite case.