StayHi- To play the stability or the up trend, while benefiting from the passing of time.
Win 100 € at maturity if the closing price of the underlying has never exceeded the barrier down. In case of crossing, the StayHi is deactivated and its value is null.
Example
Concrete case.
The share on L'Oréal is priced 59 ?. You anticipate that this action won't ever hit the limit price of 57 ? at closing in the next 4 weeks. You buy 10 ? a StayHi Option on L'Oréal with a barrier of 57 ? and a maturity date in 4 weeks. If the price of L'Oréal never touches 57 ? at closing in the next 4 weeks you win 100 ?. On the contrary you loose your initial investment, that is 10 ?. Please note that during the buy period you may also at any time resiliate your contract.
1. Relevant scenario
2. Trading with technical analysis
The StayHi allows for playing the non occurence of the price fall. Its reactivity is maximal when underlying price is near the barrier; as a counterparty the deactivation risk is higher. If the undelying price remains stable, the StayHi appreciates because the probability of reaching the barrier diminishes : we say that the "time value" increases. The increase of the time value accelerates as the maturity approaches.
Underlying price increase
Passing of time
Volatility Increase
The technical analysis is the study of the past evolution of the underlying mainly based on price charts in the prospect of predicting the trend (increase, decrease or consolidation), ampitude and time : support and resistance levels, patterns. The StayHi is adapted for benefiting from a consolidation phasis, notably by picking a barrier slightly lower than the support level.
Other products to gain from rising or stable quotes