CFDs on Synthetic Derivatives
Trade CFDs on Synthetic Derivatives with Fortissio
When referring to “Synthetic Derivatives” we mean derivatives that simulate its underlying asset (that maybe a commodity, an index, a share etc.) altering on the same time key characteristics like the price calculation. Synthetic Derivatives are complex products due to the complex methodology used for their price calculation.
As all derivative products, Synthetic Derivatives allow traders to speculate on price changes without actually owning any of the underlying assets involved. They can be used to trade a variety of financial markets like shares, commodities, indices etc. Synthetic Derivatives are traded in contracts, which means that you take out a certain number of contracts, and each is equal to a base amount of the underlying asset.
Please make sure you read the Key Information Document, Methodology, as well as the Performance Scenarios, to better understand the risks that trading with Synthetic Derivatives involve. The risk may result from changes in the asset’s price or the price methodology or how much leverage is applicable in the open position.
Each Synthetic Derivative has a specific leverage factor, which aims to replicate a multiple of the performance of its underlying asset. In other words, leverage factor is the multiplier by which the leveraged index intends to perform, relative to the parent index.
Synthetic Derivatives are complex and risky products due to the complex methodology behind their price calculation. Synthetic Derivatives are subject to Corporate Events which may occur under the following circumstances:
- If the value reaches below 50 then a reverse split is carried out on the product.
- If the value closes at greater than 10,000 then a split is carried out on the product.
In case of a reverse split after the adjustment of any transaction, if the position size will be equal to or less than 0.01, then the Company will close the relevant transaction at the last available market rate and will realise the Profit & Loss.
You must read our Key Information Document on Synthetic Derivatives for information related to this product’s methodology, performance scenarios and risks involved.