MoveLo- To play the very short term fall of the underlying.
Win 100 € if the closing price of the underlying reaches or exceeds the barrier downwards, on any day prior to the maturity.
Example
You anticipate the fall of the Dow Jones index which currently quotes 10100 points. You buy for 30 ? a HitLo option on DowJones with a barrier of 9700 points and a maturity in 4 weeks. If the Down Jones closes at a level inferior or equal to 9700 points at any day during those 4 weeks, you win 100 ? otherwise you loose your invested 30 ?. 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 HitLo provides a maximal reactivity to play the fall of the underlying price, in particular when the price stands between 40 € and 60 €. If the underlying price remains stable, the HitLo depreciates as the probability of reaching the barrier diminishes : the "time value" is said to diminish. The time value decay accelerates as the maturity approaches.
Underlying price fall
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 HitLo is adapted for benefiting from an impulsion with a down trend, notably after having exceeded a support level or after the confirmation of a resistance level.