EUREX is the world's largest exchange for standardised (i.e. unsecuritised) futures and options.
The exercise right associated with a European-style option, in contrast to that of an American-style option, can only be exerted on the expiry date of the option.
|Exercise price (a.k.a. strike price)
The exercise (or strike) price is the level at which the holder of an option or warrant can purchase (or sell) the underlying instrument by exercising the option right.
A number of structured products are based on precisely one unit of the underlying instrument. In such an instance, the exercise ratio amounts to exactly 1. But for many underlying instruments, this approach would lead to an extremely high unit cost for the given product, thereby making it impossible buy or sell with smaller investment sums. For that reason, certain products such as tracker certificates on a share index feature an exercise ratio of 0.01. Thus the price of the certificate amounts to only one-hundredth of the index level, thereby making the certificate easier to trade for private investors.
Each option/warrant confers an exercise right which the holder can exert at the end of the term (European-style) or at any time during the term to expiry (American-style). A call warrant confers the right to purchase a specific amount of a specific underlying security at a specific price. A put warrant confers a corresponding right to sell the underlying security.
Classic express certificates are suited for sideways to slightly rising markets. Upon issuance, the term to maturity of these products generally ranges from 3-5 years. During the term, several deadline dates are set. If the value of the underlying instrument on a given deadline date equals or exceeds a predetermined price level for the underlying instrument, the product becomes due and payable prematurely and the investor receives payment of a specified amount.