The DAX is currently quoted at 6.600 points and you expect rising quotes in the coming weeks or months. Thus you purchase a turbo-long on the DAX 30 with a strike at 6.380 points and a knock-out barrier at 6.495.
The
ratio is 1/100, thus the product costs (6.600-6.380)/ 100 = 2,2 EUR.
Increases the DAX 30 by 150 points, the turbo-long increases by 150/100=1,50Euro to 3,70. Decreases the DAX 30 to 6.495, it will be knocked out and you will automatically receive the residual value.
1. Relevant scenario
2. Trading with technical analysis
With the turbo-long one can profit from rising quotes with a constant leverage.
As long as the quote of the underlying security does not fall below the knock-out barrier, the turbo-long moves analog to the underlying, but due to the much smaller capital demand with an according leverage.
If at any time the quote of the underlying security falls below the knock-out barrier, the turbo-click will be knocked-out and the investor receives the residual value.
If the quote of the underlying security stagnates, the turbo loses a neglectable value, as on interest costs are charged on the financing level of 0,020%.