BNP Paribas has issued a new series of Mini Future Certificates on Italian, German and American government bond futures on Borsa Italiana. In particular, the underlyings are futures with a maturity of December 2022 of Btp at 10 years old, Bund ten-year e T-Note (10 years). These new Mini Future Certificates are characterized by the possibility of leveraged investing both upwards (Mini Future Long) and downwards (Mini Future Short). In the Long case, the expectation is a decrease in interest rates, while in the short case, an increase in rates.
Dynamic lever
The Mini Futures of BNP Paribas allow the investor to use only a part of the capital that he should have used to directly purchase the underlying asset, as well as a marginal impact of volatility on the price.
Among the main advantages offered by the Mini Future Certificates, the possibility of amplifying the movements of the underlying thanks to the use of dynamic financial leverage and, unlike the “fixed leverage” certificates, theabsence of the compounding effect. In fact, when a specific Mini Future is purchased, a certain level of Financial Leverage is fixed, which remains unchanged until the closing of the relative position, while in fixed-lever investment products, the financial leverage is fixed only on a daily basis. , which causes a misalignment over the medium term due to the so-called “Compounding effect”. Therefore, thanks to dynamic leverage, Mini Futures allow you to implement broader strategieswithout having to rebalance the position every day.
Knock Out Level
These Certificates are also characterized by the presence of a Knock out level which, once reached, determines the early expiry of the certificate, so it is not possible to lose more than the capital invested. This level is updated daily according to the same mechanism as the Strike and is higher than the Strike value for the Mini Long and lower than the Strike value for the Mini Short.
This issue, like all BNP Paribas Mini Future Certificates, has various levels of Leverage, in both long and short versions, on the same underlying, so as to allow investors to choose the one that best suits their investment objectives. Moreover, thanks to the absence of the compounding effect, the Mini Future Certficate are also ideal for implement portfolio hedging strategies.
More information on the new Mini Future Certificate range can be found at https://investimenti.bnpparibas.it/