Product Know-how

SIX Swiss Exchange - Structured Products: Structured trading. Transparently.

The benefits of trading structured products on-exchange
Structured products are traded either via the stock exchange or over the counter (OTC). Off-exchange trades are not routed via the stock exchange, but agreed and settled individually between two market participants. Trading structured products on the stock exchange has many advantages for investors and issuers alike. SIX Swiss Exchange has put together a summary of these benefits and the key arguments:

 Benefits for investors  Benefits for issuers
 Price-setting                                                   Broader distribution channel                              
 Comparability  Lower administrative costs
 Trading rules  Opportunity to stand out
 Free competition  
 Rapid execution times  
 Tradable volumes


Since buy and sell prices for structured products are set by the market maker, the investor can find out the value of a structured product on any given trading day for the entire term of the product. In addition, investors in exchange-listed structured products can compare identical products (with the same underlying instrument) offered by different banks. For example, they can track performance over recent months, the current price, the spread between bid and ask prices, and tradable contract volumes.

Protection mechanisms

Stock exchange trading in structured products is subject to strict trading rules that guarantee fair and transparent settlement for every market participant. Compliance with these trading rules is enforced by the corresponding market and trading surveillance unit at SIX Swiss Exchange. This regulated market means that private and institutional investors are treated in the same way. In addition to this form of regulation, free competition is a further mechanism that protects the investor. The large number of tradable products results in price competition between the banks, which try to offer their products at prices that are as low as possible. This enables the investor to find the lowest-cost product for them, with the smallest spread, from a selection of identical products. Care is needed when choosing the lowest-cost product, however. From the legal perspective, structured products constitute bearer bonds and will thus not be honoured should the issuer become insolvent. Here too, investors should take advantage of the broad selection of products on offer and include only structured products from well-rated issuers in their portfolio.

Execution time

Buy/sell orders that are entered at or above/below bid/ask prices respectively lead to trades in fractions of a second. Rapid order execution enables investors to pursue dynamic investment strategies and respond in seconds to current market events.

Tradable volumes

Unlike OTC trades, which are characterised primarily by very high transaction sums, the stock exchange can also be used to conclude small transactions. This makes the on-exchange trading of structured products accessible to those investors who wish to invest smaller amounts.

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