Maximizing Returns Through Structured Trades

Structured trades have become a buzzword during the past few years due to the higher return on investment offered by structured products over traditional deposits. Structured products are usually linked to the performance of underlying benchmarks or assets, such as foreign exchange rates, fx options and commodities. An underlying asset may be exposed through different modes, such as individual securities or a basket of securities.

Structured Trades: Weighing the Pros and Cons

Structured investments may be customized to achieve income, capital growth or even a combination of both. Besides, most structured products accompany capital protection, which safeguards the principal.

Other important considerations pertaining to structured trades are:

  • Although the principal is safeguarded, there is no assurance about the returns.
  • Redemption of an investment results in the removal of capital protection. Moreover, you may even have to bear some premature termination charges.
  • The structure of some products may be complex, such as a tiered rate of return system, which may become quite troublesome.

Structured Trades: Reviewing Your Options

Dual Currency Deposit is a popular element of structured trades; wherein there is the flexibility to repay the principal in an alternative currency at a predetermined strike rate upon the maturity date. Dual Currency Deposits are a highly sought-after investment vehicle, since they let you earn more than 10%, a significantly higher rate of return than the average bank rate of 1% per year.

Other reasons to consider investing in a dual currency deposit are:

  • Flexibility to choose the investment tenure, which may be as low as 2-3 weeks and as high over 6 months
  • Freedom to chose the desired currency pair, depending on your risk appetite

Principal Protected Structure is another commonly traded structured instrument. These structures are an attractive means to earn higher returns, while benefiting from greater insurance/safety.

However, keep the following pitfalls in mind before committing your funds to a principal protected structure:

  • Interest-rate risk: This implies the inherent chance that the investment’s value may change due to an alteration in the absolute level of the interest rates or the spread between two interest rates.
  • Fee risk: A principal protected structure is a managed product, which makes it subject to higher fees. This is because the principal assurance on such investments is basically an additional insurance.
  • Liquidity risk: This implies the lack of marketability of principal structured products. These products typically have a maturity period of six to ten years.

Structured Trades: The White Swan Global Markets Advantage

To execute profitable structured trades, seek the assistance of a professional investment and brokerage firm. At White Swan Global Markets, you benefit from customization of your trade ideas to best suit your risk-return expectations. We can also create zero or low-cost structured trades based on your desired risk parameters. Moreover, our investment strategists communicate lucrative trade ideas to the clients based on new market opportunities on a weekly basis. So, always remain in tune with the pulse of the market with White Swan Global Markets.


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